:: Australian Dollar: The Aussie dollar bounced off support between 0.9220 and 0.9230 on several occasions over the last 24 hours to open this morning relatively unchanged from yesterday's close at 0.9260. The local unit also endured another round of selling during the Asian afternoon following the announcement of yet another increase in the reserve requirement ratio by the Chinese central bank, a move aimed at curbing inflationary pressures and asset price bubbles. After dipping momentarily to 0.9230 overnight following some better than expected U.S economic data the AUD came straight back ahead of today's important RBA interest rate announcement with the market relatively split on the decision.
- We expect a range today in the AUD/USD rate of 0.9225 to 0.9325
:: Great Britain Pound: With Monday being a U.K bank holiday the Pound Sterling remained range bound overnight exchanging between support at 1.5210 and resistance at 1.5280 against the Greenback. Investors took leads from developments in Greece and the U.S overnight however the focus is likely to switch back to domestic issues for the remainder of this week and next with several key pieces of U.K economic data scheduled for release ahead of the election which could deliver a hung parliament for the first time since 1974. The GBP/AUD opens this morning near its lows at 1.6450 with volatility in the cross rate likely to increase today as the Australian central bank announces its interest rate decision.
- We expect a range today in the GBP/AUD rate of 1.6380 to 1.6500
:: New Zealand Dollar: The Kiwi continued its steady rise overnight to open this morning slightly above the 73 cent handle at 0.7305 after having peaked above 0.7320 against the Greenback. The move comes despite a brief dip following better than expected U.S economic data and persistent concerns around contagion fears in Europe. Yesterday's strong ANZ commodity price index and predicted rises in Labour costs scheduled for announcement today have helped underpin the gains with investors also eyeing Thursday's official N.Z employment report for further direction on the state of the local economy. The strength in the Kiwi combined with a range bound Aussie sees the AUD/NZD open lower this morning at 1.2670.
- We expect a range today in the NZD/USD rate of 0.7285 to 0.7325
:: Majors: The Euro struggled to rally in Asia yesterday with the theme continuing overnight as EUR/USD remained range bound between 1.3210 and 1.3250 during European exchange. Slightly better than expected Euro-zone PMI data exerted little influence as the market preferred to focus on the situation in Greece as the ECB joined the EU in also announcing supporting measures. The central bank said it would accept the countries debt as collateral regardless of its credit rating helping gains in bond markets. This was not enough however to increase demand in the EUR and with U.S economic data in the form of Personal Consumption and Industrial Production both coming in higher than forecast demand for the Greenback resurfaced driving EUR/USD down again to retest 1.3150. USD/JPY firmed on a more positive outlook for the U.S economy rallying towards 94.80 before pulling back slightly on profit taking to open this morning around 94.50.
:: Data Releases:
- AUD: RBA Rate Announcement
- NZD: Q1 Labour Cost Index
- USD: Mar Pending Home Sales & Mar Factory Orders
- GBP: Mar Mortgage Approvals, Mar Net Consumer Credit & Apr Manufacturing PMI
- EUR: Mar PPI
- JPY: No Data Expected Today