:: Australian Dollar: Cool winter winds may be blowing in Sydney but the Australian dollar is on fire at the moment and opens on Friday at 0.8190. Fanning the flames overnight was stronger-than-expected US retail sales data which rose 0.5 per cent in May – the first rise in three months – which weakens the greenback's safe haven appeal as the global economy shows tentative signs of bottoming out. During the local session, the Aussie was boosted by a better-than-expected jobs report for May. Whilst the unemployment rate moved back up to 5.7 per cent, total employment fell by 1,700 compared to market forecasts of 30,000. The Aussie rallied above US81 cents during the Asian session ahead of an overnight high just above US82 cents.

- We expect a range today in the AUD/USD rate of 0.8120 to 0.8245

:: Great Britain Pound: Pound Sterling has moved higher for a third-straight session against the US Dollar and opens on Friday at 1.6570. Prompting the move to an overnight high of 1.6621 were comments by Bank of England policy-maker Andrew Sentance that the recession may be “bottoming out”. The recent move higher appears to be based on sentiment at this stage and economic data will need to improve to underpin the currency. Meanwhile, the pound has been outperformed by both the Australian Dollar (2.0200) and the New Zealand Dollar (2.5780).

- We expect a range today in the GBP/AUD rate of 2.0050 to 2.0320

:: New Zealand Dollar: The New Zealand Dollar opens higher on Friday at 0.6420 after the Reserve Bank of New Zealand left interest rates on hold yesterday at 2.5 per cent. Despite the RBNZ pointing out that interest rates are likely to remain low into 2010, the market started to think that next move, however far away, may need to be higher and pushed the currency above US63 cents during local trade. The kiwi hit an overnight high of 0.6468 on the back of stronger commodities and further moves away from the greenback.

- We expect a range today in the NZD/USD rate of 0.6340 to 0.6460

:: Majors: The greenback has lost ground overnight against several major currencies despite a rise in US retail sales for the first time in three months. The Euro opens at 1.4109 on Friday after rallying from a session-low 1.3942. Retail sales rose 0.5 per cent in May in line with expectation indicating to traders that the economy is in the process of bottoming out, but it is too early to say the trend is positive. Treasuries were only marginally changed despite some renewed buying interest compared to the previous session. Meanwhile, the big dollar also lost ground against the Japanese Yen and opens today at 97.50.

:: Data Releases:

  • AUD: No Data Today
  • CAD: No Data Today
  • EUR: Euro Zone Industrial Production, April
  • GBP: No Data Today
  • JPY: Industrial Production, April
  • NZD: Retail Sales, April
  • USD: Uni of Michigan confidence; Import price index, May