Daily Forecast 24/12/2009

on December 23 2009 4:24 PM

:: Australian Dollar: In local trade yesterday the Aussie struggled to break from a tight range between 0.8750 and 0.8780 entering offshore exchanging near the bottom of the band at 0.8755. Investors immediately pushed it lower again in anticipation of continued demand for U.S dollars as it reached a bottom near 0.8730. Disappointing economic data out of North America caught the market by surprise however and the Aussie quickly reversed its fortunes trading back above the 88 cent handle late in the New York session. Whether last night's move higher will continue over the Christmas period will depend to a large degree on this evening U.S economic data releases with Durable Goods and weekly jobless data scheduled.

- We expect a range today in the AUD/USD rate of 0.8750 to 0.8830

:: Great Britain Pound: U.K economic data released overnight in the form of the Bank of England minutes and net mortgage lending by local banks appeared to have had little influence on the Cable. GBP/USD exchanged between 1.5930 and 1.5960 for the majority of the European trading day only moving briefly to a high of 1.5990 during the U.S session following some weaker than expected North American economic data. This morning sees the Pound Sterling exchanging at 1.5955 and 1.8130 against the U.S and Australian dollars respectively.

- We expect a range today in the GBP/AUD rate of 1.8080 to 1.8180

:: New Zealand Dollar: Third quarter New Zealand GDP data disappointed the market yesterday increasing by only 0.2% amidst economist forecasts for a 0.4% rise in economic growth for the quarter. The immediate reaction saw NZD/USD drop from 0.7020 to a low of 0.6970 with the Kiwi then spending the majority of the Asian and European trading sessions bouncing between 0.6980 and 0.7000. It did stage a recovery in the U.S time-zone following a broad based sell-off in the Greenback pushing back to a high of 0.7065 to open this morning at 0.7040. Yesterday's move in the NZD saw the AUD/NZD cross rate jump from 1.2465 to1.2550 however the majority of the move was reversed in overnight trade with the cross opening this morning back at 1.2490.

- We expect a range today in the NZD/USD rate of 0.7000 to 0.7075

:: Majors: U.S economic data released overnight served as a stark reminder of the challenges facing the economy as it attempts to recover from the recession in 2010. Both personal income and spending increased less than expected in November but it was the massive 11.3% drop in New Home Sales during the month and a lower than forecast University of Michigan confidence report that changed sentiment towards the Greenback overnight. The big dollar fell against the majors with EUR/USD moving from 1.4240 to 1.4365 and USD/JPY falling to 91.33 after exchanging near 92 in early offshore trade. Heading into the holiday period this evenings U.S Durable Goods and Initial Jobless claims are likely to capture the markets attention and set the tone for the next week's trading with a marked improvement on both indicators expected. In other news, scheduled for release in Asia today the market will scrutinise the Bank of Japan minutes from the recent meeting looking for direction on monetary policy in 2010.

:: Data Releases:

  • AUD: No Data Expected Today
  • NZD: No Data Expected Today
  • USD: Nov Durable Goods & Weekly Jobless Claims
  • GBP: No Data Expected Today
  • EUR: No Data Expected Today
  • JPY: BoJ Minutes

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