:: Australian Dollar: The Australian dollar is weaker once again versus the Greenback starting today at 0.8945 US. Yesterday Chinese producer prices jumped 6.8%, the fastest in 19 months, while inflation climbed 2.8% exceeding forecasts. Property prices also rose at record pace in April jumping 12.8% adding pressure on policy makers to raise interest rates to prevent the Chinese economy overheating. Overnight the Aussie fell to 0.8930 after Australian Treasurer Wayne Swan delivered the nation’s annual budget aiming to bring the budget into a A$1 billion surplus 3 years on the back of bullish growth forecasts. Concerns the EU’s aid package won’t halt the region’s crisis is also weighing on risk currencies such as the Aussie.
- We expect a range today in the AUD/USD rate of 0.8870 to 0.8950
:: Great Britain Pound: The Pound reversed its position overnight as Conservative leader David Cameron, whose deficit-cutting commitments seem more fiscally credible, was appointed as the new Prime Minister after Gordon Brown resigned. With industrial production climbing five times more than analysts predicted and UK GDP estimated to increase by 0.5% the Pound rallying almost 2% against the Greenback breaking above 1.5000 briefly. This morning the Pound opens at 1.4926 US. Meanwhile the Pound starts today stronger against the Australian and Kiwi dollar buying 1.6684 and 2.0836 respectively.
- We expect a range today in the GBP/AUD rate of 1.6600 to 1.6710
:: New Zealand Dollar: The Kiwi gave up its recent gains as enthusiasm for the EU’s rescue package waned. The Kiwi followed the Australian dollar down as investors lost patience with the Euro. Offshore, investors chose to be conservative favouring the Yen and US dollar as speculation mounted David Cameron would become the next British Prime Minister. The high level of volatility in the current market sees the Kiwi open at 0.7160 US. Against the Aussie, the kiwi is slightly higher at 0.8000.
- We expect a range today in the NZD/USD rate of 0.7110 to 0.7180
:: Majors: Offshore, German inflation figures, reported to have fallen -0.1% as predicted, were over-shadowed with concerns the Euro region’s most indebted countries would not be able to contain deficits despite the 1 trillion rescue plan. The Euro continued its slide down as investors questioned whether the proposed bail out was sustainable long term. Fuelling investor flight from the Euro Alabama Senator Richard Shelby emerged from a closed door meeting with Federal Reserve Chairman Bernanke having been briefed ‘This [aid package] is basically not a panacea ‘ and ‘temporary’. Bernanke is not alone in his dissatisfaction, credit rating agency Moody’s has made investors jittery with talks of downgrading Greece to junk levels. The Euro opens today at a pre-bail-out level of 1.2625 against the US.
:: Data Releases: AUD: Housing Finance, March CAD: No data today EUR: Euro Zone GDP, Q1 GBP: Unemployment Rate, March; BoE Quarterly Inflation Report JPY: No data today NZD: No data today USD: Trade Balance, March