:: Australian Dollar: The Australian Dollar opens sharply lower on Wednesday at 0.8260 after the Reserve Bank of Australia left interest rates unchanged at 3 per cent. In the accompanying statement Governor Stevens noted that the present accommodative setting of monetary policy remains appropriate for the time being. After the announcement, the Aussie took a brief tumble down towards US84 cents. In offshore trade, risk aversion swept currency and equity markets pushing the Aussie to an overnight low of 0.8242. In the near-term at least, the Aussie is likely to find some support today in the form of second-quarter gross domestic product where recent government stimulus is expected to result in another positive outcome.
- We expect a range today in the AUD/USD rate of 0.8220 to 0.8350
:: Great Britain Pound: Pound Sterling opens lower today at 1.6155 against its US counterpart. Traders sold the pound to an overnight low of 1.6112 after a report showed an index of UK manufacturing dropped to 49.7 in August compared to 50.2 in July. Earlier in the session, the pound traded as high as 1.6375. Limiting the losses however was separate Bank of England report revealing mortgage approvals at a 15-month high in July. Meanwhile, the pound has picked up some ground against both the Australian Dollar (1.9550) and the New Zealand Dollar (2.3940).
- We expect a range today in the GBP/AUD rate of 1.9440 to 1.9620
:: New Zealand Dollar: A follow-through from Monday's surprise surge in the monthly NBNZ Business Confidence Survey (a measure of New Zealand business confidence for the next 12 months) came in well above expectations at 34.2 compared with a previous reading of 18.7 was enough to keep the Kiwi dollar above the 0.6850 mark for the majority of Asian trade yesterday. A combination of risk aversion and recent rumblings from RBNZ Governor Alan Bollard that the local currency was overvalued and was hindering exports, the NZ Dollar was sold overnight to a low of 0.6719 and opens locally on Wednesday at 0.6750. With domestic data being scarce this week in the land of the long white cloud, Kiwi direction will be taken from offshore events.
- We expect a range today in the NZD/USD rate of 0.6700 to 0.6820
:: Majors: Despite some stronger than expected economic data released in the United States, the greenback has tumbled against the Japanese Yen for a sixth-straight session as financial stocks drop on Wall Street. USD/JPY opens lower on Wednesday at 92.87 after a flight to safety as the Dow Jones fell 185 points. The ISM factory index posted its biggest two-month gain since 1983, rising to 52.9 in August revealing an expansion in the industrial sector. US pending home sales were also higher, up 3.2 per cent in July. Meanwhile, the Euro opens lower at 1.4221 despite economic data showing the 16-nation region is slowly moving towards recovery. Euro-zone manufacturing rose to 48.2 in August, the highest level in 14 months whilst the number of jobless in Germany fell for a second consecutive month.
:: Data Releases:
- AUD: GDP, Q2
- CAD: No Data Today
- EUR: GDP, Q2; Euro Zone PPI, July
- GBP: PMI construction, Aug
- JPY: No Data Today
- NZD: No Data Today
- USD: ADP employment change, Aug; Non-farm productivity, Unit labour costs, Q2; Factory orders, July; FOMC minutes