:: Australian Dollar: The Aussie dollar drifted lower in Asia yesterday pulling back from its opening levels near 90 cents before finding some support around 0.8950. The move came despite an increase in confidence within the business community as measured by the NAB Business Confidence index with investors instead focusing on news that the IMF will sell some of its gold reserves. Better than expected U.S economic data improved sentiment in offshore trade taking the Aussie back above 90 cents ahead of the much anticipated half yearly parliamentary hearing where RBA governor Stevens addresses the house of representatives. In his address it is expected that the central bank head will deliver an upbeat assessment of the local economy however there is some risk any bullish comments will be balanced by concerns over Europe and a potential slowdown in China throughout 2010.
- We expect a range today in the AUD/USD rate of 0.8965 to 0.9050
:: Great Britain Pound: The Pound continued its slide down despite a report indicating UK manufacturing figures improved to -36 in line with market expectations. The Sterling fell below 1.5560 as concerns over the viability of the UK's fiscal deficits continued to dominate investor sentiment with Net Public borrowing increasing 4.3 billion. The Cable met with some reprieve and opens at 1.5620 today in the wake of disappointing US leading index results which weakened the Greenback. The GBP is also down against the stronger Aussie buying 1.7320 after the Aussie strengthened on the back of fairly positive US data and stronger commodites.
- We expect a range today in the GBP/AUD rate of 1.7250 to 1.7365
:: New Zealand Dollar: The Kiwi traded to the downside in Asia yesterday following a sharp decrease in N.Z Consumer Confidence and a lower Aussie dollar. After opening the day on its highs near 0.7050 support around the 70 cent level was tested but held firm in late Asia and early Europe. A larger than expected U.S PPI report sparked a rally in the high yielders which sees the NZD/USD open this morning on its highs back near 0.7050. Further direction is likely to come from across the Tasman with the RBA governor speaking and the all important U.S Consumer Price Index this evening.
- We expect a range today in the NZD/USD rate of 0.7025 to 0.7085
:: Majors: Japan's central bank left rates unchanged and made no comments on the possible extension of its QE measures in its meeting in Asia yesterday with the Yen gaining steadily against the US throughout trade in Asia and Europe. The Euro retested 9 month lows around 1.3535 USD early in European trade as concerns over lagging growth occupied the mindset of investors who are not convinced the worst of Europe's Sovereign Debt issues are over. The region's weak consumer spending is expected to stifle growth as the Trojan horse delivered to win this war will more than likely hold reduced government spending and increased taxation as its soldiers. The Euro rose almost 1% following an increase in risk appetite after the U.S Produce Price Index increased 1.4%. The Dollar hit a high of 91.475 JPY upon the release of this data with the EUR/JPY cross also rallying sharply. The US Dollar receded from its highs when it was revealed leading US economic indicators grew 0.3%, half the forecasted growth, leaving the Yen and Euro to open at 91.300 and 1.3600.
:: Data Releases:
- AUD: RBA Governor testimony to the House of Representatives
- NZD: Jan Credit Card Spending
- USD: Jan CPI
- GBP: Jan Retail Sales
- EUR: Dec Current Account & German Jan PPI
- JPY: BoJ Monthly Report & Dec All Industry Activity Index