:: Australian Dollar: In what has become somewhat of an anticlimax to Tuesday’s rate announcement the Aussie dollar appears to have found a solid short term trading range over the last 24 hours bouncing between 0.7125 and 0.7035 for the majority of this period to open this morning just shy of the 71 cent mark. This may be about to change however heading into today’s official Australian employment figures with the unemployment rate tipped to rise from 5.2% to as high as 5.4% by many economists. With a result of this magnitude seemingly factored into the currency it would take a much larger increase, 5.5% or higher, for the Aussie dollar to break through what has been fairly solid downside support around the 70 cent mark in Asia today.
- We expect a range today in the AUD/USD rate of 0.7025 to 0.7125
:: Great Britain Pound: With no meaningful U.K economic data released overnight the minutes to the March U.S Federal Reserve bank meeting were the main focus for currency markets. The release confirmed the dire state of the world’s largest consumer economy with the massive job losses a central theme. In reaction to the release the Greenback weakened from its overnight lows around 1.4640 to finish the session hovering around the 1.4700 mark in exchange with the big dollar whilst early morning trade with the Aussie dollar is at 2.0715. Tonight sees the much anticipated Bank of England meeting; March PPI and Trade Balance data which will see volatility intensify with resistance at 1.4770 the key to any further upside potential in the GBP/USD rate.
- We expect a range today in the GBP/AUD rate of 2.0580 to 2.0780
:: New Zealand Dollar: With currency markets seemingly lacking direction the Kiwi edged higher on the back of U.S dollar weakness and demand against the Aussie dollar. After opening in London around 0.5720 the NZD peaked near 58 cents in late U.S trade as equity markets closed in positive territory for the first time in several sessions. Today sees the Kiwi open at 0.5780 and 1.2255 against the Greenback and Aussie dollar respectively ahead of March QV house prices and the Easter long weekend.
- We expect a range today in the NZD/USD rate of 0.5730 to 0.5830
:: Majors: A 0.7% drop in exports out of Germany during the month of February was outweighed by a 4.2% decline in imports to send the trade surplus up to 8.7 billion Euros, a better net result than the decline to 7.5 billion that many analysts were expecting. The Euro traded higher against the Greenback with investors overlooking further declines in German factory orders over the same period preferring instead to focus on the persistent weakness in the U.S economy. In another sombre assessment of the U.S economy the minutes to the Fed’s last meeting took centre stage sending the USD lower against the other major currencies. Officials remained concerned about “downside risks to an outlook for activity that was already weak” and that “Credit conditions remained very tight, and financial markets remained fragile and unsettled, with pressures on financial institutions generally intensifying”. The big dollar pared back gains made earlier in the overnight session dropping from 100. 35 to a low of 99.30 against the Yen and from 1.3175 to 1.3305 Euros. Heading into the Easter long weekend direction for the major currencies is likely to come from more German and U.S economic data in addition to continued Fedspeak with comments expected from several central bank officials.
:: Data Releases:
• AUD: Mar Employment Data
• NZD: Mar QV House Prices
• USD: Feb Trade Balance & Fedspeak
• GBP: BoE Meeting, Mar PPI & Feb Trade Balance
• EUR: German CPI Forecast & Feb German Industrial Production
• JPY: Feb Machine Orders
• CAD: Mar Unemployment, Feb New Housing Practice & Feb International Merchandise Trade
:: Note: The above exchange rates are based on interbank rates.