:: Australian Dollar: The Australian Dollar opens little changed on Wednesday at 0.8440. In offshore trade the unit traded between a low of 0.8384 in early Europe and a high of 0.8450. In local economic data, retail sales fell 1.4 per cent for the month of June, but surged overall throughout the June quarter. The Aussie initially fell on the news towards 84 US cents, before bouncing back to spend most of the local session around the 0.8440 area. Meanwhile, the Reserve Bank of Australia (RBA) left interest rates on hold at 3 per cent but they may be uncomfortable with yesterday's housing data release which showed national prices have risen 4.2 per cent in the June quarter. The RBA's accompanying statement was neutral and suggested they will be watching key economic data over the next few months, in particular employment rates.
- We expect a range today in the AUD/USD rate of 0.8375 to 0.8475
:: Great Britain Pound: Pound Sterling opens today at 1.6936 against its US counterpart. In overnight trade the pound hit a high of 1.7004 – a level not seen since October 20, 2008. The Bank of England meet on Thursday and the pound may receive a further boost if it decides to pause its so-called quantitative easing program, which is the buying of bonds with newly created money, in order to lower borrowing costs and stimulate the recovery. Meanwhile, the pound has eased slightly against both the Australian Dollar (2.0050) and the New Zealand Dollar (2.5130).
- We expect a range today in the GBP/AUD rate of 1.9950 to 2.0100
:: New Zealand Dollar: The New Zealand Dollar opens higher on Wednesday at 0.6730. Throughout the offshore session the kiwi traded between a low of 0.6644 and a high of 0.6746. In local economic news released yesterday, the Labour Cost Index rose by 2.8 per cent for the June quarter compared to a year earlier and the number of hours worked fell slightly, particularly in the manufacturing sector. The kiwi traded briefly above US67 cents but settled into a range around the 0.6680 region for most of yesterday's local session. The kiwi has also firmed against the Aussie and opens today at 0.7970. There is no local data due for release today.
- We expect a range today in the NZD/USD rate of 0.6680 to 0.6755
:: Majors: The big dollar opens little-changed against both the Euro (1.4409) and Japanese Yen (95.22) on Wednesday after the US National Association of Realtors reported that pending home sales increased 3.6 per cent in June. Not for the first time in recent weeks, economic data has come in better than economists forecasts resulting in moves away from safety (e.g. the greenback) and into assets denominated in Australian and New Zealand Dollars. Meanwhile, the Canadian Dollar has retreated from its 10-month high against the greenback as Finance Minister Mr Jim Flaherty said “steps” could be taken to hose down the currency's recent advance.