:: Australian Dollar: Demand for higher yielding assets dampened on concern China's bank stress tests will reveal losses, softening the Australian Dollar during Asia. The Aussie traded mostly between 0.9130 - 0.9160 against the US Dollar before falling from a near-three-month high against the greenback as a drop in U.S. stocks discouraged demand for currencies related to economic growth. The number of Americans filing for unemployment benefits unexpectedly rose, intensifying speculation the Federal Reserve will introduce stimulus measures next week at its next policy meeting. The news sent the Aussie down to an intra-day low of 0.9115 US. The Australian Dollar opens this morning firmer at 0.9150 US ahead of today's RBA monetary policy statement.
- We expect a range today in the AUD/USD rate of 0.9120 to 0.9175
:: Great Britain Pound: Sterling opens lower for the third day against the Greenback at 1.5886. The Bank of England's decision to keep interest rates at a record low weakened the Pound against the Greenback. Committee members voted to keep key interest rates at 0.5%, a position they have maintained since March 2009.The gathered committee also voted not to modify the stocks of asset purchases, currently at £200 billion. The British currency climbed to 1.5923 against the big dollar in the lead up to the central bank's official cash rate announcement. The Cable retreated towards 1.5820 from its intra-day high losing strength amid a decline in stocks in Wall Street as US continuing jobless claims exceeded estimates. Meanwhile the Pound opens lower against the Aussie at 1.7360 and 2.1777 against the Kiwi.
- We expect a range today in the GBP/AUD rate of 1.7315 to 1.7380
:: New Zealand Dollar: This morning the Kiwi opens buying 0.7294 US Dollars. The Kiwi sank 0.8% to 0.7274 US immediately following worse-than-expected unemployment figures. New Zealand's unemployment rate surged back to a 10 year high jumping to 6.8% in the second quarter. Economists has expected jobless rates to increase to 6.4% after is biggest decline last quarter. The surprisingly large figure added to evidence New Zealand's economic recovery is losing momentum and will put pressure on the RBNZ to stop increasing interest rates. Overnight the Kiwi slumped to 0.7246 against the US Dollar following disappointing US jobless reports.
- We expect a range today in the NZD/USD rate of 0.7290 to 0.7340
:: Majors: The US Dollar slumped towards 8 month lows against the Japanese Yen as jobless claims climbed by 19,000 to 479,000 in July. The increase in unemployment claims was a surprise with most expecting a decline to 456,000. The report intensified speculation the Federal Reserve will introduce stimulus measures next week at its next policy meeting sending the USD down to 85.70 against the Yen as traders turned to the safety of the Japanese currency. The Euro was firmer against the Greenback after falling as low as 1.3121 versus the US Dollar, late in Asian trade. Ahead of the European Central Bank's rate decision the Euro advanced to 1.3220 US. ECB President Jean Claude Trichet reiterating his message that monetary policy remains appropriate. With nothing new to offer, Trichet's comments sent the Euro below 1.3200 US.
:: Data Releases:
- AUD: RBA Quarterly Monetary Policy Statement
- CAD: Employment Rate, July
- EUR: German Industrial Production, July
- GBP: NIESR GDP Estimate, July
- JPY: Leading Index, June
- NZD: No Data Today
- USD : Non Farm Payroll s, Unemployment Rate, July