:: Australian Dollar: A slightly lower than forecast 0.2% May Retail Sales result coupled with a 6.6% fall in Building Approvals for the same month saw the Aussie dollar momentarily dip below 0.8320 during yesterday's local session. Adding to the downside momentum was a drop in Chinese Manufacturing PMI data which continued to cast doubt on the growth outlook for Asia's engine room. After entering the offshore session around 0.8350 it moved higher thanks to general USD weakness and speculation that the Australian government has come to an agreement with miners to water down the resource super profits tax. This morning sees the AUD/USD pushing above 0.8450 with further Greenback weakness expected heading into this evenings U.S employment report.
- We expect a range today in the AUD/USD rate of 0.8420 to 0.8520
:: Great Britain Pound: The Pound Sterling entered early London exchange on its lows at 1.4875 but rallied hard throughout the offshore session to open at 1.5165 against the Greenback, its highest level since early May. Disappointing U.S economic data and relaxed fears around the European banking system supported the move whilst U.K Manufacturing PMI came in on expectations. The GBP/AUD cross rate also traded higher momentarily pushing above 1.8100 for the first time since the 5th of February 2010 but opens this morning back at 1.7905 following an early morning rally in the AUD.
- We expect a range today in the GBP/AUD rate of 1.7820 to 1.8000
:: New Zealand Dollar: The Kiwi ran into some stiff resistance ahead of 0.6880 during early morning trade yesterday before tracking the Aussie dollar lower throughout the majority of the session. Support at 68 cents held firm however with the NZD/USD staging a remarkable rally overnight to open this morning back above 69 cents. The rebound was attributed to USD weakness following a 30% drop in North American Pending Home Sales and nervousness ahead of non-farm payrolls with weekly jobless claims rising more than economist forecasts.
- We expect a range today in the NZD/USD rate of 0.6850 to 0.6975
:: Majors: The ECB provided a 6 day funding extension to banks that had taken up the 12 month lending program boosting sentiment on the Euro overnight. Investors have become somewhat comfortable that the loan expiry will not trigger any major banking failures following the previous nights less than expected 3 month rollover requirement, hence EUR/USD pushed back through 1.2300 rallying hard to a high of 1.2530. U.S economic data released overnight fell well short of expectations with a massive 30% drop in Pending Home Sales and a larger than forecast rise of 472k in weekly jobless claims triggering a sell-off in the Greenback. One of the main beneficiaries of the move was the Japanese Yen which began its move higher following yesterdays positive Tankan quarterly manufacturing survey, extending gains against the U.S dollar overnight to exchange below 87 for the first time since December 2009. This morning sees the big dollar open at 87.70 and 1.2510 ahead of the much anticipated U.S employment report scheduled for release this evening with analysts expecting a drop in non-farm payrolls of around 120k jobs or more.
:: Data Releases:
- AUD: No Data Expected Today
- NZD: No Data Expected Today
- USD: Jun Payrolls, Jun Unemployment Rate & May Factory Orders
- GBP: Jun PMI Construction
- EUR: May PPI & May Unemployment Rate
- JPY: Jun Monetary Base