:: Australian Dollar: The Australian Dollar opens higher today against the big dollar at 0.8270. Recent gains fizzled out during local trade yesterday as Asian equity markets pulled back helping to push the Aussie down to an intraday low just above US82 cents. Also weighing on the currency was soft economic data in the form of new home loans which fell 1.8 per cent in April – the seventh consecutive monthly fall. During overnight trade, the unit moved between a low of 0.8193 up to a high of 0.8340 as commodity prices moved higher and sentiment improved. Today’s local unemployment data will be closely watched with economists forecasting 20,000 new positions and a small improvement in the jobless rate.
- We expect a range today in the AUD/USD rate of 0.8220 to 0.8340
:: Great Britain Pound: Pound Sterling (1.4520) moved marginally higher overnight against the greenback ahead of tonight’s UK central bank meeting. The Bank of England will most likely leave the benchmark interest rate unchanged at 0.5 per cent. After hitting a two-week low yesterday of 1.4347, the UK currency found some support and reached a 24-hour zenith of 1.4607. Meanwhile, the pound is largely unchanged against its antipodean rivals trading at 1.7500 against the Aussie and 2.1690 versus the New Zealand Dollar.
- We expect a range today in the GBP/AUD rate of 1.7450 to 1.7580
:: New Zealand Dollar: In what was seen by most economists as a 50/50 call, the Reserve Bank of New Zealand has today lifted the official cash rate by 25 basis points to 2.75 per cent. The last time the central bank raised rates was July 2007. Central Bank Governor Mr Alan Bollard said in his accompanying statement that “further removal of stimulus will be reviewed in light of economic and financial market developments”. As a result, the kiwi rallied half-a-US-cent at this morning’s open and at time of writing is trading at 0.6710. During overnight trade, the currency moved between a low of 0.6660 up to a high of 0.6740 as commodity prices moved higher supporting currencies linked to risk. Meanwhile, the kiwi is trading at 0.8080 against the Australian Dollar.
- We expect a range today in the NZD/USD rate of 0.6680 to 0.6750
:: Majors: The Euro (1.1970) moved higher against the greenback overnight on speculation the European Central Bank (ECB) will use tomorrow’s interest rate announcement as an opportunity to comment on how it intends to address the deterioration in financial market conditions. A rally in stocks and commodities also buoyed sentiment for a change, enabling the 16-nation currency to hit an overnight high of 1.2070. Euro zone interest rates are tipped to remain at 1 per cent. Meanwhile, the big dollar is steady against the Japanese Yen at 91.28 after the U.S. Federal Reserve’s Beige Book business survey revealed the economy is making modest gains in consumer and business activity.
:: Data Releases: AUD: Unemployment rate, May CAD: No data today EUR: ECB Interest rates, May GBP: BoE Interest rates, May JPY: GDP, Q1 NZD: RBNZ Interest rates, May USD: No data today