:: Australian Dollar: The AUD staged a strong rally during yesterday's local session as investors gained confidence from a positive finish on Wall Street on Friday and eyed this week's presidential handover in the U.S. After posting an intraday high of 0.6840 the Aussie dollar came under some strong selling pressure as the Euro declined to fall to an overnight low of 0.6678. This morning sees it open right on 67 cents against the Greenback and 60.80 Japanese Yen with little upside movement expected in Asia today.
- We expect a range today in the AUD/USD rate of 0.6680 to 0.6730
:: Great Britain Pound: The U.K financial system continues to be plagued by massive financial losses with the Royal Bank of Scotland the latest casualty. RBS warned that its losses in 2008 will be significantly worse than previously anticipated, possibly as high as 20 billion Pounds. The news hit the airwaves as investors were still attempting to come to grips with more poor housing data with Rightmove House prices declining a further 1.9% for the month taking the annual drop to 7.3%. As a result the GBP/USD plummeted from early London highs above 1.4850 to exchange as low as 1.4435 in early morning trade. With inflation and retail data scheduled for release tonight and the BoE minutes also due on Wednesday the Pound Sterling is likely to continue along its downward path to retest long term technical support at 1.4350. A decline in the Aussie dollar limited the losses in the cross rate as it opens this morning down from the Asian close of 2.1810 at 2.1565.
- We expect a range today in the GBP/AUD rate of 2.1425 to 2.1625
:: New Zealand Dollar: The New Zealand dollar opens this morning 2.4% below yesterday's peak at 0.5545 amidst thin overnight trading conditions. With the U.S Martin Luther King Jr holiday volumes were low and direction for the markets came from movements in the Euro and Pound. The Greenback strengthened against these currencies as a by product of negative sentiment towards the European and U.K economies dragging the Kiwi dollar to this mornings open of 0.5420. Today sees the release of two important pieces of New Zealand economic data with analysts expecting fourth quarter inflation to drop from 1.5% to -0.5% and December Food prices to come in flat.
- We expect a range today in the NZD/USD rate of 0.5350 to 0.5450
:: Majors: The Euro fell sharply in offshore trade from its early peak at 1.3365 to open this morning on its lows at 1.3100. With ratings agency Standard and Poor's cutting the sovereign rating of several European countries such as Spain and Greece the EUR began to slide and the move accelerated once the ECB downgraded growth forecasts. The central bank predicts GDP will fall by 1.9% in 2009 less than it had previously thought with many analysts expecting growth to go as low as 1.5% in the region. The market ignored comments from ECB member Provopoulos who sees limited room for further rate cuts in Europe and if the markets should be expecting us to cut as far as 1 percent or even lower, this is something different. With the U.S on holiday celebrating Martin Luther King Jr day trading volume was low and EUR/USD, USD/JPY and EUR/JPY all drifted lower. Tuesday sees the swearing in of President Obama and many expecting him to hit the ground running, announcing further measures aimed and supporting the financial system and stimulating growth.
:: Data Releases:
• AUD: No data expected today
• NZD: Q4 CPI & Dec Food Prices
• USD: No data expected today
• GBP: Dec CPI & Nov RPI
• EUR: Jan Eurozone & German ZEW Sentiment Survey
• JPY: Dec Household Confidence
• CAD: Bank of Canada Rate Decision
:: 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.