Daily Forecast - 29/1/2010

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:: Australian Dollar: The Australian Dollar opens at 0.8940 after a volatile 24-hour session which saw it trade between a low of 0.8910 during early Sydney trade yesterday and a high of 0.9044 in early Europe. Support for the Aussie came after US President Barack Obama pledged an extension of tax incentives for small business aimed at underpinning the economic recovery. However, the unit moved lower overnight in line with a weaker Euro. The 16-nation single currency hit fresh 6-month lows overnight at 1.3955 as budget deficit concerns in Greece has investors reducing exposures to riskier assets and high-yielding currencies. The Euro weakness however has sparked importer interest with the AUD/EUR cross rate trading near two-year highs at 0.6390.

- We expect a range today in the AUD/USD rate of 0.8890 to 0.8975 

:: Great Britain Pound: The Pound opens today lower at 1.6130 after reaching a daily high last night of 1.6275 against the Greenback. The unit reached an overnight low of 1.6110 before sliding dramatically as S&P analysts expressed concern over the state of UK banks stating they are no longer the world's most stable and low risk. Given the current state of the British economy today's UK consumer confidence and housing figures will be closely analysed by investors. Meanwhile the Sterling opens lower against both the Australian Dollar (1.8015) and the New Zealand Dollar (2.2860)

- We expect a range today in the GBP/AUD rate of 1.7980 to 1.8100 

:: New Zealand Dollar: The New Zealand Dollar opens on Friday at 0.7044 after failing to hang onto yesterday's gains above US71 cents after the RBNZ left the official cash rate unchanged at 2.50 per cent. General risk aversion in light of European budget deficit concerns is weighing on high-yielding currencies. In overnight trade, the kiwi moved between a low of 0.7038 and a high of 0.7138. Meanwhile, the kiwi opens marginally lower against the Australian Dollar at 0.7870.

- We expect a range today in the NZD/USD rate of 0.7010 to 0.7075 

:: Majors: The Euro opens sharply lower against the greenback at 1.3973 as investors shun riskier assets amid continued European budget turmoil. The Euro hit a fresh six-month low overnight of 1.3935 on the back of unsubstantiated rumours that EU member states are examining ways to provide financial assistance to Greece. German and French Finance Ministry spokespersons both stated the rumours were without foundation. Also aiding the big dollar overnight was strong economic data as orders for durable goods rose 0.9 per cent in December. Meanwhile, the Japanese Yen strengthened marginally overnight and opens today at 89.80.

:: Data Releases:

  • AUD: Private Credit, Dec
  • CAD: GDP, Nov
  • EUR: EZ Unemployment Rate, Dec
  • GBP: Consumer Confidence, Jan
  • JPY: Unemployment rate, Industrial production, Household spending, Dec
  • NZD: Merchandise trade, Dec
  • USD: GDP, Q4
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