:: Australian Dollar: A 0.5% rise in the December leading index report produced by Westpac had little influence on the Aussie dollar during yesterday's local session as it remained range bound between 0.9000 and 0.9025 for the majority of the day. The theme continued throughout European exchange however volatility increased in North American trade following better than expected U.S economic data and a relatively hawkish tone to the FOMC minutes. Despite an initial jump towards 0.9035 the AUD declined rapidly to post an overnight low near 0.8975 and opens this morning hovering around the 90 cent handle.
- We expect a range today in the AUD/USD rate of 0.8950 to 0.9025
:: Great Britain Pound: UK unemployment claims unexpectedly jumped by 23,500, the highest level since 1997, exceeding market expectations by almost 10,000. This inherit sign of weakness saw the GBP topple from it's high of 1.5815 USD where it opened the European session. The BOE minutes revealed policy makers unanimously agreed to pause their asset purchasing programme to curb growing inflation. The Pound slipped to a low of 1.5665 USD during New York as investors, enticed by strong US data, turned their attentions to higher yielding currencies. The Sterling starts its day lower in Asia today on its lows buying 1.5680 USD and 1.4715 AUD.
- We expect a range today in the GBP/AUD rate of 1.7380 to 1.7465
:: New Zealand Dollar: The Kiwi experienced a shaky day in Asia yesterday as news broke NZ farm sales in January had collapsed by more than a third to 46, the lowest in 7 years. Banks have tightened lending for Agribusiness, a fundamental components of New Zealand's economy, in response to the Reserve Banks warning last year regarding their large exposure to farming debt. During offshore trade investor optimism pushed the Kiwi to test 0.7080 USD on several occasions. Today the Kiwi opens at 0.7034 ahead of today's NZ consumer confidence figures.
- We expect a range today in the NZD/USD rate of 0.6980 to 0.7075
:: Majors: Yesterday the Euro remained relatively steady against the Greenback sitting mostly above 1.3760 in Asia. On the economic front EZ construction output grew 0.5% whilst the trade balance was reported to be 7 billion, almost doubling expectations. The release of these figures saw the Euro make a modest move up towards the 1.3790 region however it gave up its gains against the Big Dollar after EU finance ministers failed to agree on concrete measures to help Greece cut its deficit. The Euro continued to decline to an overnight low of 1.3585 as the US posted higher than expected housing starts and import prices. Similarly the Yen weakened against the USD overnight as the positive figures out of the US churned the risk appetites of investors. The release of the FOMC minutes indicated some discussion on exit strategies with policy makers agreeing that it would soon be appropriate to increase the discount rate. The USD gained more than 1% on the Yen rallying from a low of 90.083 to 91.227. This morning the both Yen and Euro open weaker against the Dollar at 91.203 and 1.3610 respectively.
:: Data Releases:
- AUD: Q4 NAB Business Confidence
- NZD: Feb ANZ Consumer Confidence Index
- USD: Jan PPI, Weekly Initial Jobless Claims, Feb Philadelphia Fed & Jan Leading Indicators
- GBP: Jan Public Sector Finances & CBI Industrial Trends
- EUR: No Data Expected
- JPY: Dec Leading Index & Dec Coincident Index