:: Australian Dollar: The Aussie dollar held on to 0.9190 during European exchange with this level becoming somewhat of a key short term technical support as it was the third time in 24 hours the AUD bounced from there. With EUR/USD breaking through the key 1.5 level AUD/USD followed suit rallying back above the 93 cents during early North American trade. A less hawkish than expected assessment of the U.S economy from the Fed led to some paring back of risk appetite and as equity markets retreated so too did the Aussie to open this morning at 0.9260 against the Greenback. Today sees a report from the Housing Industry of Australia on Housing affordability which is not expected to move the currency markets a great deal.
- We expect a range today in the AUD/USD rate of 0.9240 to 0.9320
:: Great Britain Pound: The Pound Sterling resumed its recent rally after pausing around 1.6380 ahead of last night's release of the Bank of England minutes to the last meeting. The central bank was unanimous in its decision to keep the asset purchase plan capped at 175 billion GBP, removing some fears that the amount would be increased amidst concern of a sombre economic assessment by the BoE. With the announcement out of the way and the Greenback weakening against the Euro GBP/USD rallied to an overnight high of 1.6635 before some profit taking late in the session sees it exchanging around 1.6590 this morning. The GBP/AUD cross rate is also higher trading around 1.7900 after peaking near the psychological 1.8 level overnight.
- We expect a range today in the GBP/AUD rate of 1.7825 to 1.8000
:: New Zealand Dollar: The Kiwi struggled to rally in Asia yesterday following the announcement of a 2.3% fall in credit card spending during September and a softer Aussie dollar. Once intraday topside resistance at 0.7500 had clearly broken European markets took the NZD/USD to 0.7575 before another wave of buying emerged during the North American time-zone. The main catalyst for the move was continued Greenback weakness against the majors and although a more sobering outlook on the U.S economy was delivered by the Federal Reserve Banks Beige book report the Kiwi opens this morning around the 76 cent mark.
- We expect a range today in the NZD/USD rate of 0.7550 to 0.7650
:: Majors: With no European economic data scheduled for release EUR/USD bounced between 1.4920 and 1.4960 for the majority of the early offshore session before an early rally in U.S equity markets triggered a move through the psychological 1.5 level. After posting a high near 1.5050 it then retreated somewhat following the release of the Fed's Beige book report to open this morning back at 1.4995. The report, which is a survey on the current economic situation conducted by each of the U.S Federal Reserve bank's 12 district banks, painted somewhat of a lacklustre picture on overall economic growth. The main disappointments were in the areas of credit quality and employment with weak or declining demand for loans and increasing unemployment triggering some concern to the markets on the economic recovery. North American equity markets fell sharply with the Dow Jones Industrial dropping back below the psychological 10,000 level causing a move back into the safety of U.S dollars. USD/JPY remained relatively steady to open in Asia this morning marginally below the 91 handle after trading in a 90.50 to 91.25 range overnight.
:: Data Releases:
- AUD: HIA Housing Affordability
- NZD: No Data Expected
- USD: Weekly Initial Jobless claims & Sep Leading Indicators
- GBP: Sep Retail Sales
- EUR: Aug Current Account
- JPY: Sep Merchandise Trade Balance & Aug All Industry Activity Index
- CAD: Aug Retail Sales