:: Australian Dollar: Australian construction work done rose 3.5% in the June quarter following a 1.9% rise in the previous quarter. The result exceeded market expectations of a 3% rise. Combined with encouraging export figures out of Japan, the Australian Dollar rose to challenge 0.8870 against the Greenback. Heading into the European session investors propelled the Aussie to 0.8890 US following continued positive economic news flowing from Europe. The flurry for risk was short lived as traders returned to the Greenback amid increasing risk of a double dip recession in the world's largest economy. Lacklustre demand for durable goods and declining home sales in the US saw the Aussie slump to 0.8770 USD as traders reverted to the Dollar safe haven. This morning the Aussie opens back at 0.8845.
- We expect a range today in the AUD/USD rate of 0.8785 to 0.8885
:: Great Britain Pound: Sparked by the improved business climate in Europe the Pound opened early offshore at 1.5460 USD. During the evening the Sterling made a shaky climb to 1.5470 against the Big Dollar following worse than forecast U.S. economic data which added to concern about the world's largest economy. U.K. stocks dropped for a second day, lead by mining and resource companies, as base metals declined. The discouraging news out of the US enticed investors to choose the safety of government debt. Today the Pound opens at 1.5474 against the Greenback. Meanwhile the Pound starts the day at 1.7480 Aussie and 2.2040 Kiwi.
- We expect a range today in the GBP/AUD rate of 1.7375 to 1.7575
:: New Zealand Dollar: The Kiwi traded around the 0.7030 early in Asia before unexpected expansions in Japanese exports and Australian construction saw the Kiwi test 0.7050 US briefly. Offshore improvement in German business sentiment stoked investor risk appetite pushing the Kiwi to 0.7060 against the Greenback. Later in the evening the NZD/USD sunk towards 0.6950 following further disappointing data out of the US, Durable Goods missed their forecast by a wide margin increasing by only 0.3% versus expectations of 3.0% rise, while US new home sales declined numbering only 276k. This morning the Kiwi opens buying 0.7020 US Dollars.
- We expect a range today in the NZD/USD rate of 0.6950 to 0.7050
:: Majors: In Asia the Euro was capped at 1.2660 against the Greenback in the aftermath of S&P's downgrade of Ireland from AA to AA-. Offshore risk appetite revived following an improvement in Germany's IFO business sentiment release. German business climate readings in August jumped to 106.7 from 106.2 previously. The Euro catapulted to 1.2725 against the US Dollar as traders focused on German data. However weak US home sales and Durable Goods figures renewed investor insecurities sending the Euro back down to 1.2660 US. Meanwhile in Japan the Yen weakened to eventually trade back at 84.80 U.S dollars after a flurry of comments from Japanese Finance Minister Yoshihiko Noda yesterday who pledged to take action when necessary as the rising Yen threatens the Japanese economy. Japan''s export growth slowed for the fifth straight month in July as Cooling global demand poses a major risk for Japans export-driven recovery.
:: Data Releases:
- AUD: Jun Conference Board Leadign Index
- NZD: No Data Expected Today
- USD: Q2 Mortgage Delinquencies & Weekly jobless claims
- GBP: Aug CBI Realised Sales
- EUR: Aug GfK German Consumer Climate
- JPY: No Data Expected Today