:: Australian Dollar: The Aussie dollar rallied in early Asia yesterday before running into some resistance around the 90 cent handle to settle at 0.8975 heading into offshore trade. With a plethora of economic data releases scheduled this week the market shrugged off a slightly softer than expected Current Account, lower Inventories and a drop in inflation expectations. Instead investors were focused on today's RBA meeting with futures markets pricing in a 60% chance of a 25 basis point rise in the official cash rate adding support to the AUD/USD. This morning sees the Aussie dollar open on its highs having bounced back to exchange marginally above the 90 cent handle at the time of writing with both Retail Sales and Building approvals released this morning prior to the interest rate decision at 2.30pm AEDST sure to keep the local currency volatile.
- We expect a range today in the AUD/USD rate of 0.8925 to 0.9075
:: Great Britain Pound: The Pound Sterling continued to deteriorate in overnight trade plummeting to its lowest level since April 2009 to exchange as low as 1.4785 against the Greenback. Despite an early London attempt at a rally resistance at 1.5180 proved too strong with lower than expected Mortgage Approvals during January and a slight downtick in Manufacturing PMI enough to trigger the selloff. The move lower was exacerbated by more downward pressure on EUR/USD with GBP/USD eventually finding some reprieve, bouncing back towards 1.5 in late U.S trade. The GBP/AUD cross rate continues its meltdown capitulating from 1.6900 to at one stage exchange below 1.6550 and opens at 1.6630 as the Aussie dollar rallied ahead of expectations the RBA will raise interest rates at its meeting today.
- We expect a range today in the GBP/AUD rate of 1.6520 to 1.6750
:: New Zealand Dollar: The Kiwi remained contained in a 30 point range between 0.6970 and 0.7000 for the majority of the day in Asia yesterday with only second tier economic data in the form of a 2.4% decline in Visitor Arrivals during January and the ANZ February Commodity Price index for guidance. The volatility picked up overnight however with NZD/USD dipping to 0.6930 before bouncing back to open this morning on its highs just shy of the psychological 70 cent mark. With no N.Z economic data for guidance the Kiwi is likely to be driven by developments in Europe and across the Tasman with the announcement of several key pieces of economic data out of Australia, the highlight being today's RBA interest rate announcement. The AUD/NZD cross rate opens up from yesterdays Asian close of 1.2840 to exchange at 1.2870 after having peaked near 1.2900 overnight.
- We expect a range today in the NZD/USD rate of 0.6925 to 0.7050
:: Majors: Better than expected Euro-zone economic data gave the EUR/USD a boost during early offshore trade yesterday bouncing from below 1.3600 to a high around 1.3650. The January unemployment rate had been forecast to increase from a downward revised 9.9% to around 10.1% with the steady 9.9% result adding some support to the single currency. However with the market still awaiting a concrete announcement about Greece investor confidence waned and the Euro drifted lower in U.S trade to retest previous lows ahead of 1.3450. U.S economic data fell short of expectations with the core personal consumption expenditure or PCE as its referred to coming in flat and with ISM Manufacturing declining risk appetite waned once again. This morning sees the big dollar open in Asia around 1.3550 and 89 against the Euro and Yen respectively with the markets cautiously expecting Greek officials to reveal new measures in coming days.
:: Data Releases:
- AUD: Jan Retail Sales, Jan Building Approvals & RBA Rate Decision
- NZD: No Data Expected Today
- USD: Feb Vehicle Sales, Feb 28 ABC Consumer Confidence & Fedspeak
- GBP: Feb Construction PMI
- EUR: Feb Annual CPI Estimate & Jan PPI
- JPY: Jan Jobless Rate & Jan Household Spending