:: Australian Dollar: The Australian Dollar opens sharply lower on Wednesday just under US89 cents after weaker than expected U.S. consumer confidence data released overnight took the wind out of the sails of higher yielding currencies and riskier assets. The Aussie had a quiet local session on Tuesday but came to life during a pre-dinner speech by Reserve Bank official Ric Battellino who said, amongst other things, that the exchange rate will probably continue to rise, briefly pushing the unit to a one-month high above 0.9050. The rally was short-lived however as risk-aversion took over during the New York session which saw a gradual 2-cent decline down to a low of 0.8877.
- We expect a range today in the AUD/USD rate of 0.8870 to 0.8945
:: Great Britain Pound: The pound opens lower today at 1.5430 after Bank of England Governor Mervyn King said officials would do whatever seems appropriate to prevent a relapse in the UK economy. Sterling fell from an intraday high of 1.5574 down to a low of 1.5394 as the governor's comments signalled to the market that the central bank may expand its 200 billion-pound bond buying program. Meanwhile, the pound has outperformed its antipodean rivals overnight and opens higher against the Australian Dollar (1.7320) and the New Zealand Dollar (2.2290).
- We expect a range today in the GBP/AUD rate of 1.7280 to 1.7375
:: New Zealand Dollar: The New Zealand Dollar opens sharply lower on Wednesday at 0.6910 after weaker than expected U.S. consumer confidence data released overnight took the wind out of the sails of higher yielding currencies and riskier assets. The kiwi was unable to hang onto the recent gains above US70 cents and declined gradually during the New York session to a low of 0.6890 as signs the global recovery may slow weakened demand for commodity-linked currencies. Meanwhile, the kiwi is down from 2-year highs against the Euro and opens at 0.5100.
- We expect a range today in the NZD/USD rate of 0.6875 to 0.6945
:: Majors: The Euro opens lower today at 1.3520 after declines in business and consumer confidence in Europe and the United States raised concerns about global growth. Global equities and commodities were also lower, dampening demand for currencies linked to economic growth. Business confidence in Germany declined for the first time in 11 months whilst the U.S. consumer sentiment index fell to 46 - the weakest level in 10 months and much lower than economists forecasts. The data backs up the recent comments from Federal Reserve Bank of San Francisco President Janet Yellen who said yesterday that the U.S. economy still needs the support of extraordinarily low rates. Meanwhile, the Japanese Yen (90.10) also rallied across the board.
:: Data Releases:
- AUD: Wage price index, Q4
- CAD: No data today
- EUR: German GDP, Q4
- GBP: No data today
- JPY: Trade Balance, Jan
- NZD: No data today
- USD: New Home sales, Jan