Australian Dollar: The Australian Dollar opens higher today at 0.9120 against the greenback. As expected, the US Federal Reserve left interest rates unchanged at the current setting of zero to 0.25 per cent. The Aussie moved to an offshore high at time of writing of 0.9143. During the domestic session on Wednesday, the unit slid down to 0.8970 as retail trade fell 0.2 per cent in September. The disappointing number does not support the case for a third consecutive hike in interest rates by the Reserve Bank of Australia in December. It turned out a knee-jerk reaction as the unit bounced back and spent most of the local session above US90 cents.

- We expect a range today in the AUD/USD rate of 0.9050 to 0.9200

Great Britain Pound: Pound Sterling opens higher against the greenback today at 1.6584 in the lead-up to tonight's central bank meeting. Overnight, the pound traded between a low of 1.6400 up to a high of 1.6596. The Bank of England is expected to announce a 50 billion pound extension to its asset-purchase program which is designed to stimulate the ailing economy. Assuming interest rates are not cut further, there may be some upside potential for the pound near-term. Meanwhile, the pound is largely unchanged against both the Australian Dollar (1.8150) and the New Zealand Dollar (2.2740).

- We expect a range today in the GBP/AUD rate of 1.8080 to 1.8260

New Zealand Dollar: The New Zealand Dollar opens higher on Thursday against its U.S. counterpart at 0.7280. The domestic session saw the unit largely range-bound between 0.7165 and a high of 0.7230. During the offshore session, the kiwi moved to from a low of 0.7200 to a high of 0.7310 after the U.S. Federal Reserve, as expected, left interest rates unchanged at the current setting of zero to 0.25 per cent. Local third quarter unemployment data is scheduled for release today however the kiwi is being driven more by interest rate differentials and stronger commodity prices at the moment.

- We expect a range today in the NZD/USD rate of 0.7230 to 0.7360

Majors: The big dollar is trading weaker against the Euro today (1.4878) after the U.S. Federal Reserve kept interest rates at their current low level of between zero and 0.25 per cent where it has been for almost 12 months. The Euro rallied sharply late in the session from a low of 1.4702 up to 1.1908. The Federal Open Market Committee (FOMC) pledged once more to keep rates exceptionally low for an extended period as it copes with the economic constraints of high unemployment, sluggish income growth and tight credit conditions. High-yielding currencies such as the Australian & New Zealand dollars and commodity based currencies such as the Canadian Dollar (1.0610) all rallied overnight as stocks and commodities strengthened.

Data Releases:

  • AUD: Trade Balance, Sep
  • CAD: Building Permits, Sep; Ivey PMI, Oct
  • EUR: EZ Retail Sales, Sep; ECB Rate Announcement
  • GBP: BoE Rate Announcement
  • JPY: BoJ Monetary Policy meeting minutes, Oct
  • NZD: Unemployment, Q3
  • USD: Unit Labour costs, Q3

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