:: Australian Dollar: The Aussie dollar bounced back from sub 91 cents to a 0.9135 in Asia yesterday with the release of Chinese economic data which signalled a strong performance in Q4 2009 and indeed throughout the calendar year. The strength however appears to be the catalyst for tightening credit controls with officials concerned about an asset bubble. Resistance at 0.9150 appeared to be too big a hurdle to break in offshore trade and with U.S equities plunging around 2% coinciding with disappointing economic data the Aussie plummeted to this morning's open near the lows around 0.9025. It appears as though the psychological 90 cent handle will be tested in Asia today with Q4 Australian international trade price index expected to show another decline in both imports and exports.
- We expect a range today in the AUD/USD rate of 0.8925 to 0.9050
:: Great Britain Pound: Resistance ahead of 1.6300 capped any attempts at a rally in the GBP/USD during early offshore trade and with public sector finance and net borrowing data disappointing the market the Pound Sterling fell dramatically. Equity markets around the world traded substantially lower for the second consecutive session adding to the allure of the Greenback and as a consequence GBP/USD exchanged as low as 1.6120. This morning sees the Pound open slightly higher near 1.6200 against the Greenback and with the AUD weakening substantially the cross opens back at 1.7950.
- We expect a range today in the GBP/AUD rate of 1.7900 to 1.8050
:: New Zealand Dollar: The Kiwi received a boost in Asia yesterday from higher than expected Retail Sales rallying to an intraday high of 0.7230. Offshore investors punished the NZD as risk appetite vanished following another negative session on Wall Street and an increase in U.S weekly jobless claims. This morning sees the NZD open on its lows at 0.7110 with downside pressure likely to continue heading into the weekend.
- We expect a range today in the NZD/USD rate of 0.7025 to 0.7150
:: Majors: Yen traded between 91.44 and 91.86 against the Greenback for most of the European session in the aftermath of China's government report in Asia yesterday where the nation's economic growth increase by 10.7%, the fastest since 2007. This saw demand for Japan's 10 year bonds fall as investors speculate growth in Asia-Pacific will accelerate. The Euro also performed poorly versus the US as Euro Zone PMI slowed, falling almost 1 cent after opening at 1.4120 to a low of around 1.4030. Near the end of London's closing Euro recovered back up to 1.4110 as US jobless claims increased more than estimated to 482K. Under performing US statistics supported the Yen's rally throughout US trade, bottoming out near 90.11 as President Obama proposed trading restrictions on financial institutions. The Euro spiked to an overnight high of just over 1.4140 against the dollar during this period. Lagging US sentiment continues to support the Yen and Euro which start today at just under 90.41 and 1.4041.
:: Data Releases:
- AUD: Q4 International Trade Price Index
- NZD: No Data Expected
- USD: No Data Expected
- GBP: Dec Retail Sales
- EUR: Nov Industrial New Orders
- JPY: Dec Department Store Sales