:: Australian Dollar: The Australian dollar opens weaker today at 0.8450 against the US dollar after pushing back from Friday’s early offshore rally above 0.8500. Volatility returned to the market as Fitch downgraded Spain’s sovereign debt and investor’s sought safety in the US dollar. Despite US consumer confidence increasing, sluggish US spending and production drove the Aussie down to an intraday day low of 0.8428. Today sees a number of Australian data releases ahead of tomorrow’s RBA meeting where the central bank is expected to keep rates on hold at 4.5%.
- We expect a range today in the AUD/USD rate of 0.8390 to 0.8500
:: Great Britain Pound: After reaching 1.4610 US dollars, it highest level in over a week, the Pound fell after Consumer confidence figures revealed a drop of -18 in May, deteriorating for the third month in a row to a 5 month low. The prospect of another tax hike combined with uninspiring comments from members the Bank of England is certainly weighing on the nation’s morale. With an increase in the interest rate unlikely the Pound opens today buying 1.4430 US. Meanwhile the Pound opens slightly weaker against the Aussie and Kiwi buying 1.7560 AUD and 2.1285 NZD.
- We expect a range today in the GBP/AUD rate of 1.7040 to 1.7150
:: New Zealand Dollar: The Kiwi followed the Aussie down after initially breaking above 0.6850 USD, its highest since May 20, in offshore trade on Friday extending its monthly decline against the Greenback. The Kiwi dropped to 0.6750 USD after Spain’s downgrade kept investors nervous and US data revealed consumer spending remained flat despite US incomes increasing 0.4%. The Kiwi opens today at 0.6770 ahead of today’s NZ business confidence figures.
- We expect a range today in the NZD/USD rate of 0.6750 to 0.6820
:: Majors: After beginning in Asia below 91 an unexpected 0.5% increase in April Retail Trade was not enough to strengthen the Yen as lower than forecast inflation and an increase in the jobless rate sent it lower in trade with the Greenback. The Yen weakened to enter offshore trade at 91.40 against the Greenback however resistance held firm and USD/JPY slid back to a low of 90.60 before finishing the week at 90.90. Hot on the heels of the banking crisis in Spain ratings agency Fitch downgraded the countries credit rating one notch from AAA to AA+ putting an end the rally that had begun in early Europe on Friday. After peaking near 1.2450 EUR/USD opens this morning near its lows at 1.2270 with the key 1.2 level remaining in focus for the markets this week.
:: Data Releases: AUD: May TD Inflation Guauge, Q1 Current Account Balance, Apr HIA New Home Sales & Apr Private Sector Credit NZD: May NBNZ Business Confidence USD: U.S Memorial Day Holiday GBP: May Hometrack Housing Survey EUR: May Euro-Zone Confidence Survey & May CPI Estimate JPY: Apr Housing Starts, Apr Construction Orders & BoJ Governor Speaks