:: Australian Dollar: After opening the week above 70 cents the Aussie dollar swiftly retreated in early morning trade as investors remained nervous following Friday's U.S employment report. Heading into the release of the December job ads the AUD was hovering around 0.6980 however it then began to plummet following the announcement of a 9.7% decline in the month with analysts immediately adjusting higher their forecasts for unemployment due this Thursday. The local unit fell to an intraday low of 0.6895 with offshore investors continuing to dump the higher yielding currency as the Euro and equity markets also traded lower overnight. The AUD opens this morning on its lows marginally above the 68 cent mark but poised to continue the move lower.
- We expect a range today in the AUD/USD rate of 0.6730 to 0.6830
:: Great Britain Pound: The Pound Sterling retreated overnight after failing to hold on to last weeks gains above 1.5. Asian support at 1.5050 gave way to a flurry of selling in early London trade with investors extremely nervous about the outlook for the global economy pushing GBP/USD to a low of 1.4815 in late U.S trade. Adding to the woes was a bounce back in the EUR/GBP which had opened the week at 0.8850 but finished last night's session back above 0.9 at 0.9020. With so much uncertainty at the moment the Sterling has failed to maintain any solid trend, in either direction and assuch the recent volatility is likely to continue for the foreseeable future. A large fall in the Aussie dollar has kept the GBP/AUD cross rate supported above 2.1600 and it opens this morning pressing against resistance at 2.1850.
- We expect a range today in the GBP/AUD rate of 2.1680 to 2.1880
:: New Zealand Dollar: The Kiwi came under strong selling pressure since the Monday morning open dropping almost 2.5% from 59 cents to finish on its lows at 0.5760 in overnight trade. Risk aversion reared its ugly head again overnight as U.S equity markets fell for the second consecutive session and with Oil prices also falling below $38 a barrel the NZD appears to be headed back to retest 0.5650 support in the near term. Despite the falls against the Greenback the cross rate strengthened as NZD/AUD posted a high of 0.8515 on the back of a large drop in the
- We expect a range today in the NZD/USD rate of 0.5700 to 0.5800
:: Majors: With Thursday's ECB interest rate meeting fast approaching investors are increasing bets that the central bank will make a larger than previously expected reduction. Markets had been pricing in a 0.5% rate cut in recent weeks however as the decision draws near the chance of a larger fall is being priced in with some analysts tipping a cut by up to 1% which would take the official rate to 1.5%. With no economic data released overnight and U.S equity markets continuing to fall EUR/JPY retreated once again dropping to 118.65, its lowest level in a month. The move pushed EUR/USD down to 1.3288 and USD/JPY to 88.90 before some support emerged from profit takers on short positions in late U.S trade. The main highlight in economic data on Tuesday is the release of November trade balance data out of the U.S although traders will continue to focus on moves in equity and oil markets.
:: Data Releases:
• AUD: No data expected today
• NZD: No data expected today
• USD: Nov Trade Balance
• GBP: Nov Trade Balance, Dec BRC Retail Sales Monitor and Dec RICS House Price Balance
• EUR: No data expected today
• JPY: Nov Trade Balance
• CAD: Nov International Merchandise Trade
:: Note: The above exchange rates are based on interbank rates. If you are considering a transfer then please login, register or call us for a live dealing rate.