Daily Forecast - 5/1/2010

By IBTimes Staff Reporter | January 04 2010 4:26 PM

:: Australian Dollar: The Australian Dollar opens higher on Tuesday at US91 cents as the greenback dropped across the board overnight. A lacklustre local session on Monday saw the unit dip towards 0.8940 as the Australian Performance of Manufacturing Index (PMI) fell beneath 50 (48.5) for the first time in 6 months after a drop in production and new orders. A reading below 50 indicates a contraction in manufacturing. It was a different story offshore however as the Aussie steadily climbed above US90 cents in European trade before peaking just a shade over 0.9100 in New York after a report showed output in the United States grew at its fastest rate in three years spurring demand for high-yielding currencies.

Sponsorship Link

- We expect a range today in the AUD/USD rate of 0.9060 to 0.9160

:: Great Britain Pound: Pound Sterling opens largely unchanged at 1.6095 despite a surprisingly volatile overnight session which saw the unit trade between a low of 1.6057 and a high of 1.6241. The pound is being supported at the moment by evidence the economy is slowly moving out of recession. U.K. equities rose to a 16-month high overnight which also aided the pound's cause. However, the pound was outperformed by its antipodean rivals and opens sharply lower today against the Australian Dollar (1.7650) and the New Zealand Dollar (2.1925).

- We expect a range today in the GBP/AUD rate of 1.7550 to 1.7720

:: New Zealand Dollar: The New Zealand Dollar begins the new calendar year trading just above US73 cents. A public holiday in New Zealand kept trade to a trickle during the local session on Monday which saw the currency drift back towards US72 cents. During the offshore session, the unit moved steadily higher, peaking at a 6-week high of 0.7336 during the New York session after report showed output in the United States grew at its fastest rate in three years spurring demand for high-yielding currencies.

- We expect a range today in the NZD/USD rate of 0.7260 to 0.7360

:: Majors: The big dollar opens weaker across the board on Tuesday as global stocks rallied and demand for riskier assets and high-yielding currencies gathered pace once more. The Euro rallied from a low of 1.4256 to a high of 1.4455 whilst the recent greenback rally against the Yen ran out of steam at 93.20. The U.S. Institute for Supply Management reported today that its factory index increased to 55.9 in December which was well above economists' forecasts and the highest reading since April 2006. The data added to recent evidence the global economy is recovering. Meanwhile, the Canadian Dollar (1.0410) advanced to a two-month high against the greenback as crude oil rose above US$81 per barrel.

:: Data Releases: