:: Australian Dollar: Home loan figures in Australia fell -3.4% in March exceeding expectations as signs the Reserve Bank of Australia’s rate hikes are starting to have an impact. Despite a fall in home loans, investment lending edged up 3% representing the biggest rise since August 2009. The Australian dollar declined overnight from an intraday high of 0.8979 as speculation mounted the sharp fall in home loan figure would encourage the Reserve Bank to keep interest rates on hold next month. The Australian dollar opens today at 0.8932 ahead of today’s unemployment figures.
- We expect a range today in the AUD/USD rate of 0.8870 to 0.8950
:: Great Britain Pound: The Pound initially reached a high of 1.5045 US after Bank of England Governor Mervyn King welcomed the proposed plan to cut the UK’s deficit lead by a 6 billion Pound spending cut and tax hike on all non-business capital gains calling it ‘strong and powerful’. This was the only positive news for the UK as unemployment figures soon quelled optimism. Jobless claims fell by -27.1K in April compared to -32.7K the month prior. With the number of unemployed Britons hitting the highest in 15 years the Pound plunged as its central bank commented there were’ somewhat greater downside risks’ to its growth forecasts. The Pound opens at a low buying 1.4817 US ahead of tonight’s UK trade balance. Meanwhile, the pound is lower against both the Australian Dollar (1.6580) and the New Zealand Dollar (2.0780).
- We expect a range today in the GBP/AUD rate of 1.6500 to 1.6620
:: New Zealand Dollar: Offshore the Kiwi gained on the back of a surge in gold and commodity prices after dipping to a low of 0.71 US earlier in Asia. Overnight the Kiwi made a several attempts at 0.72 US but was pushed back each time. The Kiwi started its slide down in the lead up to US trade figures. Although the US trade deficit widened beyond expectations reaching its highest level since 2008 investors saw the underlying consumer spending as a positive sign for the US recovery. The simultaneous rise in confidence in US assets sees the New Zealand dollar open at 0.7120 US ahead of today’s New Zealand housing prices.
- We expect a range today in the NZD/USD rate of 0.7080 to 0.7180
:: Majors: The Euro once again declined overnight opening today at 1.2610 US – not far from the recent one-year lows. The region released its Q1 GDP overnight with growth doubling expectations of 0.1%. German GDP also out stripped forecasts led by exports. Even though figures were above expectations it could not dispel concerns that the European recovery will remain frail. The Japanese Yen also weakened against the US dollar overnight, despite the release of optimistic Japanese data, as investor support grew in the wake of US economic data opening today at USD/JPY 93.26.
:: Data Releases: AUD: Unemployment Rate, April CAD: No data today EUR: ECB Monthly Report GBP: Trade Balance, March JPY: Trade Balance, March NZD: PMI, April USD: Initial Jobless Claims