:: Australian Dollar: After being sold off aggressively the AUD was hovering around the 63 cent mark in early morning trade yesterday but managed to drift higher heading into the Prime Ministers announcement of a massive 42 billion dollar stimulus package designed to help support economic growth in Australia. Resistance at 0.6360 halted any further progress leading into the RBA interest rate decision at 2.30pm eastern time with the central bank announcing a 1% interest rate reduction to take the official rate to 3.25%, its lowest rate since 1964. Despite the global economic slowdown Australia has managed to avoid negative economic growth so far and the RBA in their subsequent media release stated that The combination of expansionary monetary and fiscal policies now in place will help to cushion the Australian economy from the contractionary forces coming from abroad. The twin benefits from the government and RBA stimulus and a rally in local equities saw the Aussie dollar rally to an intraday high of 0.6420 before pulling back to enter offshore exchange at 0.6350. With global equities rallying and overseas investors confident the U.S will announce their own new stimulus package in coming days the AUD/USD roared higher to open this morning near its highs at 0.6520 ahead of todays December Retail Trade figures.
- We expect a range today in the AUD/USD rate of 0.6435 to 0.6555
:: Great Britain Pound: The Pound Sterling bounced sideways between 1.4170 and 1.4270 against the Greenback during European trade as the market searched for some clear direction ahead of this weeks BoE meeting. Adding some support was a better than expected construction sector as measured by the U.K construction Purchasing Managers Index in December. Economists had been expecting a slight drop from 29.3 to 29.0 however the 34.5 result came as a surprise adding some support at 1.4170. Sentiment improved during U.S trade with resistance at 1.4270 eventually giving way to an influx of buying to trade at a high of 1.4482 in late trade. A large rally in the Aussie dollar negated any possible benefit of the higher cable price as the cross rate drifted lower to open this morning near 2.2100.
- We expect a range today in the GBP/AUD rate of 2.1980 to 2.2220
:: New Zealand Dollar: The Kiwi dollar followed the Aussie higher yesterday bouncing from early morning lows of 0.5010 to post an intraday high of 0.5110. Late Asian profit taking and NZD/AUD selling saw it retest 0.5110 during European trade however once again support held and the Kiwi squeezed higher. Positive risk sentiment returned during U.S trade taking the NZD/USD back above 0.5100 to open this morning at 0.5135 ahead of tommorrows fourth quarter N.Z employment data which is likely to keep a lid on any upside attempts through 53 cents in coming days.
- We expect a range today in the NZD/USD rate of 0.5080 to 0.5180
:: Majors: The Euro retested Asian lows near 1.2800 during early offshore trade as Euro-zone producer prices came in lower than forecast during December dropping 1.3% for the month and taking the annual rate to 1.8%. Also adding to the selling was a larger than expected drop in German Retail Sales during December as consumer spending at the register declined 0.2%. The EUR/USD however rebounded as investors remain weary that the ECB may in fact hold rates steady at 2% when they meet this Thursday, squaring up short positions leading into the announcement. Adding to risk appetite overnight was better than expected U.S Pending home sales, some upside surprise profit reports of Wall Street and hope that the Obama stimulus package is revealed in the very near future. With the Dow Jones rallying in late trade to finish up almost 2% EUR/JPY and USD/JPY both rallied late in the day to finish at 116.40 and 89.30 respectively.
:: Data Releases:
• AUD: Dec Retail Trade
• NZD: Q4 Employment
• USD: Jan ISM Non-Manufacturing composite & Jan ADP employment change
• GBP: Jan PMI Services
• EUR: PMI Services & Dec Retail Sales
• JPY: No Data Expected today
• CAD: No Data Expected today
:: Note: The above exchange rates are based on interbank rates. If you are considering a transfer then please login, register or call us for a live dealing rate.