International Payments Specialist

Aussie Dollar soars to a six month high after the RBA surprised markets by keeping keeping the official cash rate unchanged at 4.25 percent

noreply@blogger.com (Jan Borgelt) — Tue, 07 Feb 2012 21:14:00 +0000

Australian Dollar: The Australian Dollar rallied to its highest level in six months versus its US Counterpart after the Reserve Bank of Australia surprised markets, keeping the official cash rate unchanged at 4.25 percent. With the majority of commentators expecting a rate cut, the Aussie Dollar rallied hard for much of the afternoon session reaching an eventual high of 1.0822 against its US Counterpart. Reserve Bank Governor Glenn Stevens went further in a statement to say that global sentiment had generally improved in December with growth remaining close to trend and inflation close to target. This morning sees the Australian Dollar open noticeably higher after an overall positive session currently trading at a rate of 1.0782 against the Greenback.

New Zealand Dollar: In what was a relatively flat session for the New Zealand Dollar yesterday the Kiwi has remained range bound for much of the past 24 hours trading between a low of 0.8313 and a high of 0.8372 against its US Counterpart. Throughout the domestic session local equity markets and commodities prices offered very little support for the kiwi with Investors unwilling to take the kiwi through its next resistant level around 83.80 US Cents. In overnight events markets remained edgy ahead of ongoing Greek debt talks, with Greek PM Lucas Papademos set to finalise a new accord agreeing to bailout conditions this evening. Whilst Greece has dominated the headlines there remains overall greater optimism as the New Zealand Dollar opens at a very similar level to where we left it yesterday currently swapping hands a rate of 0.8348

Great British Pound
UK Stocks were little changed overnight as investors wait nervously for Greek politicians to agree on spending cuts to help ensure the Nation receive its next stage of financial aid. In what has been dominating headlines for the past 12 months, overall the mood remains positive that an adequate outcome will be announced this evening. Despite the Sterling again taking the majority of its direction out of Europe, the Great British Pound has managed to find some upside over the past 24 hours trading between a range of (1.5787 – 1.5903) against its US Counterpart, opening stronger this morning at a rate of 1.5890. Looking ahead this week the major risk event for the Sterling occurs overnight Thursday where the Bank of England is set to meet to discuss the Nations current Monetary Policy Stance.

Majors: The Dow Jones finished around 0.15 of a percent stronger overnight with the Industrial Average closing at its highest level since May 2008. Helping improve global sentiment overnight Greece moved closer to reaching an agreement to secure international aid with Greek PM Lucas Papademos likely to sign an accord this evening. In further signs conditions throughout the 17-Nation region are improving, the EURO has managed to find some solid ground up above the 1.32 handle trading as high as 1.3269 over the course of the last 24-hours. Meanwhile in the US overnight the bearish stance of the Federal Reserve has also been maintained with Chairman Ben S Bernanke reiterating that long-term employment remains a major concern for the world’s largest economy. Despite the strong GDP and employment results which have been filtering through over the previous quarter Bernanke’s has confirmed that their still remains a long way to go before labour markets begin to start operating normally. In what proved to a busy session for global markets, similar the EURO the Greenback also managed to find some solid support opening stronger against the Japanese Yen at rate of 76.741.

Data releases
AUD: No Data Today
NZD: No Data Today
JPY: Bank Lending y/y, Current Account
GBP: BRC Shop Price Index y/y
EUR: German Trade Balance, French Gov Budget Balance
USD: FOMC Member William Speaks

Retail Sales in Australia posted their weakest annual growth in 27 years

noreply@blogger.com (Jan Borgelt) — Mon, 06 Feb 2012 21:55:00 +0000

Australian Dollar: Retail Sales in Australia posted their weakest annual growth in 27 years with Annual Sales growing by a mere 2.4 percent in a report released by the ABS yesterday. In the crucial month of December Sales posted a surprise fall of 0.1 percent which saw the Australian Dollar sold for much of the intraday session trading to a 24-hour low of 1.0682 against its US Counterpart. Despite the weak reading the RBA is due meet today where its widely expected they will reduce the benchmark cash rate by 25 basis points from its current level 4.25 percent. Opening this morning lower against the Greenback at a rate of 1.0729, trading ranges are likely to remain choppy given the high chance that a rate cut has already been priced in to the Australian Dollar’s current price.

New Zealand Dollar: The New Zealand Dollar traded sideways for much of yesterday and despite the positive employment reading bolstering demand for the kiwi overnight Friday, it has struggled to advance from its five-month high against its US Counterpart around the 83.50 US Cents Level. With New Zealand Markets closed yesterday the Kiwi lost half a cent over the course of the local session drifting to an eventual low of 0.8285. Concerns that Greece’s political leaders will fail to reach an agreement on a 130 billion EURO bailout has plagued global risk-sentiment over the course of the last 3 days with sentiment deteriorating as talks drag on. Meanwhile this morning despite the significant headwinds coming out of Europe the Kiwi opens only marginally lower against its US Counterpart currently swapping hands a rate of 0.8336.

Great British Pound: UK Stocks dropped yesterday with the FTSE losing 0.2 percent, snapping a four day rally. All eyes have been on Greece over the past 24 hours with European Leaders becomingly increasingly frustrated at the delays in reaching an agreement to the conditions of a bailout. Despite concerns continuing to mount surrounding the euro-area fiscal crisis the Sterling did manage to find some minor support locally yesterday with house prices in January increasing by 0.6 precent, beating expectation. After earlier trading as low as 1.5739 against its US Counterpart the Sterling did find some upward support reaching an eventual high of 1.5840. Meanwhile this morning the Great British Pound opens stronger against both the Australian Dollar (1.4747) and New Zealand Dollar (1.8973)

Majors: Following a five week advance for the S&P 500 Index, US Stocks dropped yesterday amid ongoing concerns that Europe’s debt crisis is set to again worsen. In what is turning into a very long-winded process German Chancellor Angela Merkel voiced publicly her concerns over Greece, emphasising the fact that time is now running out to find a solution. With political leaders set to resume meetings this evening significant downside for the 17- Nation Euro remains a distinct possibility should leaders fail to meet the conditions of a 130 billion-euro bailout. Still in Europe, German Factory orders for the month of January surprised on the upside growing by 1.7 percent helping the EURO reach an overnight high of 1.3140 against its US Counterpart, opening this morning at a rate of 1.3125. In what is shaping up as an eventful evening, whilst Greek talks are likely to dominate risk flows US Fed Reserve Chairman Ben Bernanke is due to testify on the economic outlook and federal budget situation before the Senate tonight with traders keen to see whether the central banks bearish stance will remain. Meanwhile this morning there has been a slight move back into the Greenback with the US Currency opening stronger against the Japanese Yen this morning at a rate of 76.559.

Data releases:
AUD: AIG Construction Index, Cash Rate, RBA Rate Statement
NZD: Labor Cost Index q/q
JPY: Leading Indicators
GBP: BRC Retail Sales Monitor y/y
EUR: German Industrial Production m/m
USD: Fed Chairman Bernanke Testifies, IBD/TIPP Economic Optimism, Consumer Credit m/m

Aussie Dollar opens lower at 1.0725

noreply@blogger.com (Jan Borgelt) — Sun, 05 Feb 2012 21:09:00 +0000

Australian Dollar: The Australian Dollar traded in cautious ranges throughout its onshore session on Friday, as markets remained on tenterhooks ahead of key unemployment data from the world's largest economy. With Asian equity markets marginally down the Australian Dollar drifted lower from opening levels around 1.0710 to 1.0680 by the switch to offshore hours. However, with sentiment improving into Europe the Aussie picked up from intra-day lows and eventually shot back through 1.0700 to above 1.0780 after the much anticipated US non-farm payrolls was released. An additional 243,000 jobs added during the month of January boosted economic outlook for the United States and in turn demand for the higher-yielding Australian Dollar. Holding on to most of these gains into close of markets, the Aussie opens this week lower at 1.0725 with today’s retail sales figures for the month of December the first scheduled risk event for the week.

New Zealand Dollar: The New Zealand Dollar rallied on Friday after a report out of the US showed employers in the world's biggest economy added more jobs than forecast in January, spurring demand for riskier assets. After earlier opening the day at a rate 0.8330 against its US Counterpart, the kiwi was well purchased up above 83 US cents, reaching an eventual high of 0.8378 in early morning trade. Nearing the highest levels seen since September last year the New Zealand Dollar opens this morning stronger against the Greenback, currently swapping hands a rate of 0.8335. Looking ahead today ranges over the coming 24 hours a most likely to be dictated by offshore happenings given the public holiday taking place domestically.

Great British Pound: Following a relatively subdued start to the day the Great British Pound found around half a cent on the upside heading into European trade with investors driving the Sterling to an 24 hour high of 1.5859 against its US counterpart. Despite Services PMI coming in well above expectation with a positive reading of 56.0, the Sterling ran out of steam late in the session dropping to reach an eventual low of 1.5749. Opening this morning at 1.5765, a level slightly lower to where we left it on Friday, speculation continues to mount that the Bank of England will raise its target for asset purchases when the central bank meet this coming Thursday. Meanwhile this morning Sterling opens weaker against both the Australian and New Zealand Dollar currently trading at a rate of 1.4685 and 1.8875 respectively.

Majors: The Greenback has strengthened from levels close to post-war lows against the Japanese Yen after this January's Non-Farm Payroll report surprised markets with a figure well above expectations. Showing employers to have added an impressive 243,000 jobs last month, a figure larger than both last month's figure of 203,000 and this month's expectation of 150,000, the Greenback rallied from 76.20 to 76.60 Yen. With US non-manufacturing PMI also surprising to the upside this combination of events placated market speculation of additional economic stimulus by the Federal Reserve; speculation which has weighed on the value of the US Dollar of late. Also rallying against the Euro throughout Friday's offshore session the pair moved lower to 1.3080 after Greenback strength was magnified following a still absent agreement between Greece and its private creditors, as well as a a 0.4% drop in Euro zone retail sales. The US Dollar did pare some of its gains into the close of markets and this morning opens slightly higher against both the Euro, which hovers just above the 1.3100 handle, and the Yen just above 76.50.

Data releases:
AUD: Retail Sales m/m; ANZ Job Advertisements m/m
NZD: Bank Holiday
JPY: No data due for release
GBP: Halifax HPI m/m
EUR: Sentix Investor Confidence; German Factory Orders m/m
USD: No data due for release

Markets nervous ahead of Greek deal & key unemployment data out of the US this evening…

noreply@blogger.com (Jan Borgelt) — Thu, 02 Feb 2012 21:50:00 +0000

Australian Dollar: The Australian Dollar gained 20-30 points during local trade yesterday after it was announced our trade surplus increased to 1.71 billion dollars from a previous 1.38 billion. With markets expecting a slight reduction the news came as a pleasant surprise, lifting the Aussie from levels just above 1.07 to 1.0730. Concurrently, building approvals dropped 1% in the month of December although the markets chose to overlook this in favour of a positive trade release. With markets nervous ahead of a still yet to be confirmed Greek deal with its bond holders, as well as key unemployment data out of the US this evening, the Aussie struggled to hold onto its highs. Drifting lower into offshore trade, fluctuating risk sentiment kept trade moving between 1.0690 and 1.0740 and we open ahead of the final trading day of the week at 1.0710.

New Zealand Dollar: An absence of key local data releases has kept the New Zealand Dollar at the mercy of risk sentiment over the past 24 hours, where it has remain in range bound trade for the most part. With investors setting up camp on the sidelines ahead of key unemployment data from the US this evening, this nervousness has been amplified by the failure of Greece to reach and agreement with its creditors as yet. Sitting above support at 0.8315, a brief risk rally took the Kiwi to highs near 0.8360 however it settles lower this morning back at 0.8330. An increase in the trade surplus of Australia did pose a momentary threat to recent gains the New Zealand Dollar has made against its rival across the Tasman; a determined Kiwi refusing to give ground so easily sees the pair this morning back at the familiar level of 1.2850 (0.7782).

Great British Pound: Sterling has fallen back from near two-and-a-half month highs against the Greenback overnight after Construction PMI for the month of December disappointed the markets. The Markit Economics survey signalled a thirteenth successive monthly rise in UK construction sector output; however the rate of expansion eased and was modest. A reading of 51.4 caused the Pound to drift back from intraday highs near 1.5850 to open this morning at 1.5800/10. Also drifting lower against the Australian and New Zealand Dollars, risk sentiment has limited movement with Sterling opening at 1.4750 and 1.8965 respectively.

Majors: Despite Greece failing to reach an agreement with its private sector bond holders, the Euro Dollar appears hesitant to break from its current ranges against the Greenback. Whilst disappointment as to the lack of progress caused the single currency to fall to intraday lows of 1.0390, anticipation of tonight US Non-Farm Payrolls kept hesitant traders within recent ranges. With what we could see as a prelude to tonight’s key employment data, unemployment claims in the US fell by 12,000, more than the 6,000 drop that was anticipated. Investor sentiment picked up on the news, along with an increase in Nonfarm Productivity and Labor Costs, sending the Greenback lower on demand for riskier assets. The Euro trades this morning back at 1.3140/50 and the Japanese Yen has risen back towards highs at 76.15.

Data releases:
AUD: AIG Services Index;
NZD: Visitor Arrivals m/m
JPY: No data due for release
GBP: Services PMI
EUR: Final Services PMI; Retail Sales m/m; Italian Prelim CPI m/m
USD: Non-Farm Employment Change; ISM Non-Manufacturing PMI; Unemployment Rate; Average Hourly Earnings m/m; Factory Orders m/m

Disappointing housing data outweighed by better than expected Chinese manufacturing figures...

noreply@blogger.com (Jan Borgelt) — Wed, 01 Feb 2012 21:43:00 +0000

Australian Dollar: The Australian Dollar was engaged in sideways trade during local hours yesterday as disappointing housing data was outweighed by better than expected figures pertaining to Chinese manufacturing. Whilst the markets were expecting a contractionary number of 49.8 the Chinese PMI index actually showed 50.5, rising from November’s reading of 50.3. As China is Australia’s largest trading partner, positive economic releases will support our local unit and this support saw the Aussie trade up to 1.0630 however cautious trade into European hours saw the dollar come off, dipping to 1.0575. Concern proved unnecessary however and when overnight trade provided positive manufacturing reports from both Europe and the US, risk sentiment ran rampant. The Aussie raced to highs near 1.0730 barely batting an eyelid at 1.0700, although it has returned to this resistance level as of first thing this morning. Today markets will be watching Trade Balance figures for further direction where economists predict our surplus to narrow slightly.

New Zealand Dollar: In what was a quiet day for the New Zealand Dollar, markets spent most of the morning consolidating after yesterday’s risk rally and subsequent sell-off. Hovering around its opening levels of 0.8250, the main risk event for the Kiwi was Chinese manufacturing data for the month of December, and although figures were slightly better than expected there was little effect on the NZD. Drifting lower before the switch to London hours, the New Zealand Dollar remained above 0.8210 however positive manufacturing figures from Europe and the United States sent general risk appetite soaring and the Kiwi rallied to nearly 5 month highs around the 0.8350. Against the Australian Dollar the Kiwi has maintained recent gains although it has failed to extend them much further; trading this morning at 1.2850 (0.7782).

Great British Pound: Keeping in line with the global theme last night, the United Kingdom’s monthly manufacturing report showed a much better than expected figure of 52.1, higher than December’s reading of 49.7. Bouncing from intraday lows of 1.5720, Sterling pushed higher initially to 1.5780 however thanks to positive risk sentiment it continued to two-and-a-half month highs around 1.5860. Falling back slightly to open this morning still above $1.58, the Pounds has slipped in relation to its riskier counterparts. Falling to 1.4765 against the Aussie it trades this morning at 1.4790; lows below 1.9000 were established against the Kiwi and the pair trade this morning at 1.9015.

Majors: The US Dollar has fallen against all but 3 of its major trading partners after a wave of positive manufacturing was released in succession around the globe. Starting in the Asian session, China’s manufacturing sector unexpectedly expanded in the month of December; In Europe, its region’s PMI hit a five-month high of 48.8, up from December’s reading of 46.9; and the much anticipated ISM manufacturing PMI report from the States came in 0.2 above the previous month at 54.1. With manufacturing levels beating expectations in three of the world’s largest economies, risk sentiment burgeoned and the Euro Dollar raced to levels above 1.3200; the only set back being a smaller than predicted number of job increases in US non-farming industries, according to a survey by private company ADP. The Japanese Yen also rallied against the Greenback, falling to within one Yen of post war highs and levels as to which markets would expect an intervention by the Bank of Japan. Touching 76.02 the safe haven pair now trade at 76.20 after US manufacturing provided the US Dollar some support. The Euro currently buys $1.3160.

Data releases:
AUD: Building Approvals m/m; Trade Balance
NZD: ANZ Commodity Prices m/m
JPY: Monetary Base y/y
GBP: Construction PMI
EUR: PPI m/m
USD: Unemployment Claims; Prelim Nonfarm Productivity q/q; Prelim Unit Labor Costs q/q

Local housing data and China manufacturing figures out today...

noreply@blogger.com (Jan Borgelt) — Tue, 31 Jan 2012 21:46:00 +0000

Australian Dollar: The Australian Dollar rallied off opening levels yesterday as Australian business confidence rose to its highest level in seven months, a survey by National Australia Bank showed. Rising from 1.0590 to 1.0640 during local hours, the Aussie was also given a lift after the IMF said it does not see ‘hard landing’ risks in China and Greek PM Lucas Papademos said his government was close to a deal to ease its crippling debt burden. This risk rally continued well through the European session as markets remained hopeful towards a Greek deal however as it became apparent this may not be finalised until mid-February, the Aussie was knocked from its perch. Failing to break resistance at 1.0680, the local unit fell to break below the 1.0600 handle before a slight recovery brought us to today’s open of 1.0615. On the calendar today is local housing data as well as manufacturing figures from our largest trading partner, China.

New Zealand Dollar: New housing approval numbers rose 2.1% in December, helping the New Zealand Dollar rally from opening levels of 0.8185. Also lifted higher by a statement from the International Monetary Fund, which said they do not see risks of a ‘hard landing’ in China, and confirmation from the Greek Prime Minister that a deal is close with their bond-holders, the Kiwi saw highs above 0.8235 into the move offshore. Continuing risk sentiment sent the local unit to eventual highs above 0.8290 however the pair was not able to break resistance to reach 0.8300. Falling back to 0.8250 this is where we open this morning ahead of a quiet day on the domestic front. Against the Australian Dollar the Kiwi has gained some ground opening today at 0.7780.

Great British Pound: The British Pound strengthened to its highest level since November as the Greenback weakened amid speculation a deal was soon to be reached between Greece and its private bondholders. Rallying to levels around 1.5790, Sterling initially ran into some headwinds when UK consumer credit figures hit a record low in December, highlighting the road to economic recovery is still long and hard. Ultimately, the 1.5800 barrier was out of reach and when it became apparent that a Greek deal was not going to be reached in the short-term at least risk appetite waned and Cable fell back to today’s opening levels of 1.5760.Against its higher-yielding counterparts, Sterling has gained some tentative ground taking it to 1.4840 against the Aussie and it holds around 1.9100 against the Kiwi. Relevant to the value of the Pound today is local manufacturing PMI as well as ongoing fluctuations in risk sentiment.

Majors: The Euro climbed to highs above 1.3200 overnight before falling sharply to find support at 1.3050 with a multitude of events kept investors on their toes. Earlier in the day Greek PM Lucas Papademos said his government was close to a deal to ease its crippling debt burden, and this optimism led markets on a risk rally despite the rate of European unemployment remaining at highs of 10.4%. As the session wore on it became apparent a deal between Greece and its private bondholders was further off than implied and with speculation this could now drag on until February 13th, the Euro dropped to aforementioned support of 1.3050. Adding to the deterioration of risk sentiment and hence the rise in the Greenback was disappointing consumer confidence and Chicago PMI from the United States. With the Chicago index of business activity an important barometer for the health of the entire nation, a fall to 60.2 from the previous 62.5 was understandably disappointing for a recovering economy. The Japanese Yen has also remained close to 3 months lows, 76.20, on heightened risk aversion and speculation is beginning to circulate as to a potential Bank of Japan intervention.

Data releases:
AUD: AIG Manufacturing Index; HIA New Home Sales m/m; HPI q/q
NZD: No data due for release
JPY: Average Cash Earnings y/y
GBP: Manufacturing PMI; Nationwide HPI m/m
EUR: CPI Flash Estimate y/y; Final Manufacturing PMI
USD: ADP Non-Farm Employment Change; ISM Manufacturing PMI; Crude Oil Inventories

Australian Dollar falls 0.6% during Asian trade...

noreply@blogger.com (Jan Borgelt) — Mon, 30 Jan 2012 21:39:00 +0000

Australian Dollar: After opening the week near 1.0640, the Australian Dollar fell by 0.6% during Asian trade as speculation surrounding Chinese monetary policy weakened the local unit. With China’s central bank holding off on decreasing the amount of money banks must hold in reserve, the Aussie fell as markets were hoping the expected decrease would free up more cash to support demand for our commodities. With risk aversion continuing into the European and North American sessions as well as Fitch placing Australia’s big 4 banks on ratings watch negative, the Australian Dollar continued lower to eventually find some intraday support at 1.0530. Paring a degree of these losses we open this morning at 1.0590 with NAB Business Confidence and Private Sector Credit m/m on the local calendar today. We expect a range today of 1.0540 – 1.0640

New Zealand Dollar: The New Zealand Dollar has fallen against the Greenback and the Japanese Yen as talks between Greece and its bondholders made little to no progress overnight. After starting the week at 0.8230 the Kiwi first slipped lower in the local session after China’s central bank failed to loosen its monetary policy as expected. Commodity exporting countries such as New Zealand saw their currencies depreciate as speculation circled this would reduce demand for exports. Falling to 0.8200 by the switch to London hours, the Kiwi continued lower as developments in Europe added little to lift the mood. After reaching lows of 0.8160 we open this morning at 0.8190 ahead of Building Consents for the month of December. Trade on the Australian Dollar cross saw the Kiwi rally earlier above 0.7760 however fall back to similar opening levels this morning of 0.7735. We expect a range today of 0.8120 – 0.8220

Great British Pound: In a day where the local economic calendar held nothing of note, Pound Sterling was subject to weakening risk aversion that began during the Asian session. Opening levels of 1.5730 were not seen for long and by the switch to local hours Cable had consolidated lower towards the 1.5700 handle. With risk aversion heightening after a disappointing Italian bond auction and speculation towards the idea Greece may require a larger bailout package sent the Pound to 1.5655as the Greenback benefitted from safe-haven flows. Finding support at these intraday lows, Sterling opens today back towards the 1.5700 mark with Consumer Confidence figures due for release today. We expect a range today of 1.5640 – 1.5760

Majors: Italy held its first bond auction since the country was downgraded by Fitch last Friday and it fell short of its maximum target. Selling 7.5 billion Euros of 5 to 10 year bonds left investors feeling uneasy and along with speculation Greece will require a larger bailout package and Spain’s economy contracting 0.3%, markets took on a risk adverse tone. The Japanese Yen rallied against most of its major counterparts, the Euro falling very briefly below 100 yen and the Greenback falling near 76.20. Although the Japanese remained the main beneficiary of safe-haven retreats, the Greenback also succeeded in gaining ground against its riskier trading partners after income and spending data from the world’s largest economy showed consumers were saving more than spending, even in the month of December. From start of trade on Monday the Euro fell over 1.0% to lows of 1.3080. It opens this morning at 1.3120 with a basket of fundamental releases expected from Europe and the US, not to mention ongoing talks in Europe.

Data releases:
AUD: NAB Business Confidence; Private Sector Credit m/m
NZD: Building Consents m/m
JPY: Manufacturing PMI; Household Spending; Unemployment Rate; Prelim Industrial Production
GBP: GfK Consumer Confidence; Net Lending to Individuals m/m
EUR: German Retail Sales m/m; French Consumer Spending m/m; Unemployment Rate
USD: CB Consumer Confidence; Chicago PMI; S&P/CS Composite-20 HPI

New Zealand Dollar gains an impressive 2.3% against the Greenback last week

noreply@blogger.com (Jan Borgelt) — Sun, 29 Jan 2012 21:43:00 +0000

Australian Dollar: Interest rate differentials remained supportive of the Australian Dollar on Friday as investors continued to snap up the Australian Dollar in lieu of the Greenback, which the Fed has said will offer benchmark low interest rates through to 2014. What was a relatively quiet session in Asian hours, ongoing Chinese New Year holidays kept movements limited and the Aussie bounced between 1.0590 and 1.0630. Heading offshore, speculation Greece is close to a deal with its private sector creditors lifted sentiment, and combined with positive fundamental releases from the United States the Aussie rallied to eventual highs above 1.0660. Opening this morning near 1.0650, an absence of local data releases will direct market attention to continuing developments offshore.

New Zealand Dollar: The New Zealand Dollar gained an impressive 2.3% against the Greenback last week, reaching its highest level since September on Friday. a pledge buy the US central bank to keep the door open to further quantitative easing weakened the Greenback along with speculation Greece is close to a deal with its private sector creditors. Hitting levels above 0.8240 the Kiwi opens here this morning ahead of what we expect to be a quiet local session as focus remains on offshore developments in Europe and the United States. An impressive trade surplus for the month of December pushed the Kiwi higher against its Australian counterpart early on Friday morning, pushing to highs above 0.7740 before settling to open today at this level.

Great British Pound: The Pound Sterling pushed to new monthly highs against the Greenback on Friday as risk sentiment dampened demand for the world’s reserve currency. As an absence of local data failed to move the Pound on a domestic front, Cable moved higher as markets focused on European developments. With Greece close to a deal with its bond-holders, Cable pushed above 1.5700 and despite a brief setback to 1.5650, this sentiment along with encouraging US economic data sent the pair to highs above 1.5730. Opening this morning near these highs, Sterling is at similar levels to this time on Friday against the Australian Dollar trading at 1.4775. A better than expected Trade balance in New Zealand however has seen the Pound move lower against the Kiwi on Friday, opening this week at 1.9085.

Majors: The Euro gained in value for the fifth straight day on Friday, despite a Fitch Ratings Agency downgrade of both Italy and Spain. After starting the day trading on the 1.3100 handle it remained in the same range until the switch into local hours where it rallied higher after European Union officials claimed to be close to a deal with Greece’s creditors. As this deal is the condition that must be met in order for Greece to receive its next tranche of bailout funds, markets have understandably welcomed the news favourably. Lessening demand for safe-haven assets saw the Euro rally to 1.3160 and after the markets failed to react to the ratings downgrade of Italy and Spain, the Euro continued to seven week highs above 1.3200. It was during the New York session that US fundamentals helped risk sentiment, particularly US Consumer Confidence levels, which posted its highest reading in almost a year. in addition, US Gross Domestic Product came in at 2.8% for the final quarter of 2011 and although this was below economists’ average expectations at 3.0%, it was a full percentage point higher than the previous quarter. These encouraging statistics was not enough to keep the USD above 77.00 Japanese Yen however, with the pair moving back to familiar ranges around 76.65, where it opens this morning.

Data releases:
AUD: No data due for release
NZD: No data due for release
JPY: No data due for release
GBP: No data due for release
EUR: German Prelim CPI m/m
USD: Core PCE Price Index m/m; Personal Spending m/m

Bank of Russia to buy AUD as an international reserve currency...

noreply@blogger.com (Jan Borgelt) — Thu, 26 Jan 2012 22:00:00 +0000

Australian Dollar: With most of the country focused on lighting the BBQ and chilling the beer, the Aussie dollar had a relaxing Australia Day, for its onshore session at least. Moving marginally higher from its opening levels, it trading across to London hours just above 1.0600 before an announcement from Russia’s central bank broke the Aussie from its range. Deputy Chairman Alexei Ulyukayev indicated the Bank of Russia may start to buy the Australian Dollar as an international reserve currency as soon as February this year. Pushing the Aussie to nearly 3-month highs above 1.0670 was this news in combination with Federal Reserve policy to keep US interest rates at record lows through until at least late 2014. Profit-taking of long positions has seen the local unit fall back slightly to start the Asian session at 1.0620.

New Zealand Dollar: The New Zealand Dollar has risen against the Greenback overnight, as a pledge to keep US interest rates suppressed until 2014 weakens the mighty dollar. For a currency that derives a lot of its strength from interest rate yields, this increased differential sent the Kiwi to highs above 0.8220 and nearly 3 month highs helped by the decision from its own local central bank to keep interest rates on hold at 2.5%. With Australia Day in full swing across the Tasman, the antipodean pair remain in quiet trade for the full 24 hour period, opening this morning at 1.2960 (0.7716) ahead of Kiwi trade balance figures due for release this morning. The NZD/USD has consolidated lower to 0.8190.

Great British Pound: Retail Sales in the United Kingdom have suffered their biggest fall in 3 years with 44% of retailers reporting sales volumes fell on a year ago, while 22% reported a rise, giving a balance of -22%. With this disappointing data following news on Wednesday that the economy contracted 0.2% in the final quarter of last year, Sterling fell against most of its major trading partners. Falling to lows near 1.1915 against the Euro, 1.4690 against the Aussie and 1.9060 against the Kiwi these positions have recovered slightly into today’s trade. Against the Greenback however, worrying fundamentals from the UK have been outweighed by a Federal Reserve pledge to keep US interest rates at benchmark lows for longer than originally intended. This leaves Cable trading this morning at 1.5690.

Majors: The Greenback opens weaker against all of it major trading partners this morning after the US Federal Reserve pledged to keep its interest rates at record lows for longer than they had originally forecast. Announcing rates would now remain at current levels through to late 2014 rather than mid 2013 sent ripples through the market, as investors were taken by surprise. The Euro rallied to five-week highs against the US Dollar, hitting levels above 1.3170, and the Japanese Yen pushed to 77.30 as speculation of further quantitative easing followed the announcement. Further quantitative easing would effectively de-base the Greenback by injecting greater amounts of cash into the economy. The Euro has pared most of these gains by this morning’s open as talk with private sector bond holders drag on in Greece and markets become increasingly impatient for a solution. The Dollar Yen pair has since consolidated just below the 77.50 handle.

Data releases:
AUD: No data due for release
NZD: Trade Balance
JPY: Tokyo Core CPI y/y; Monetary Policy Meeting Minutes; Retail Sales y/y
GBP: No data due for release
EUR: M3 Money Supply y/y;
USD: Advance GDP q/q; Revised UoM Consumer Sentiment; Revised UoM Inflation Expectations

CPI figures due for release today

noreply@blogger.com (Jan Borgelt) — Tue, 24 Jan 2012 21:22:00 +0000

Australian Dollar: The Australian Dollar fell from a 12-week high yesterday with investors selling the Nation’s currency consistently for the majority of the overnight session. Driving the Aussie to an overnight low of 1.0427 against its US Counterpart, talks between European Finance Ministers and Greek Policy Makers hit a stalemate yesterday with investors seemingly unwilling to provide any further public money to the highly in-debited Nation. During a session in which global risk sentiment took a battering the Australian Dollar has done well to recover some its earlier losses opening this morning around half a cent lower currently swapping hands a rate of 1.0478. Looking ahead today all eyes will be on local CPI figures due for release at 11:30 am this morning, with any further cooling off in inflation likely to fuel speculation of a RBA Rate Cut next month. We expect a range today of 1.0420 - 1.0520

New Zealand Dollar: The New Zealand Dollar has again proved to be very resilient in overnight trade as it opens relatively unchanged this morning at a rate of 0.8104 against its US Counterpart. In what was a very choppy day of trading for the Kiwi, concerns over a very frail Greek Debt Deal saw the Nation’s currency lose half a cent earlier in the day, dropping as low as 0.8054. With European Officials essentially rejecting Greece’s debt deal swap, very real concerns remain surrounding a forthcoming default. Despite the global equities also losing around half a percent the New Zealand Dollar has again found some solid support above the 80 US Cents. We expect a range today of 0.8050 – 0.8150

Great British Pound: UK’s Budget Balance narrowed more than forecast in a report released yesterday providing more evidence that the government’s attempts of increased fiscal control are starting to gain some solid traction. Whilst tackling a budget deficit is being made even harder by flagging growth, addressing the deficit has now been made a priority by Policy Makers. In an overall positive session for the Sterling, The Great British Pound gained ground against its US Counterpart rallying to overnight high of 1.5615, nearing some of the highest levels we’ve seen this year. In data releases due out this evening Minutes from the Bank of England’s most recent meeting are likely to provide some insight into the Central Banks short-term Monetary Stance. Meanwhile this morning the Sterling opens stronger against the Aussie (1.4882) and the Kiwi (1.9241. We expect a range today of 1.4810 – 1.4950

Majors: Global markets finished lower in overnight trade as investors digested the IMF’s decision to cut its global growth forecast for the year ahead from 4 percent to 3.3 precent whilst also warning of a serious downturn in the event that the 17-Nation Euro-Zone was unable to successfully tackle there ongoing fiscal problems. Further adding to the negative new-flows out of Europe, talks over Greek-Debt restructuring reached a Stalemate with Private bondholders refusing to agree on a proposed debt swap deal. Despite the relatively bearish fundamentals, market sentiment has remained relatively positive with the EURO managing to hold on to its recent gains. After trading between a 24 hour range of (1.2952 -1.3062) it opens at a very similar level to where we left it yesterday at a rate of 1.3022. Meanwhile in the US, the Greenback has also benefitted from a slight flight to safety recently as it continues to hover just short of the 78 level against the Japanese Yen. In what is shaping up as a very eventful week for the Greenback and broader US Economy the Fed Reserve is due to meet this evening ahead of the release of official growth figures due out Friday.

Data releases
AUD: CPI m/m
NZD: Credit Card Spending y/y
JPY: BOJ Monthly Report, Trade Balance
GBP: MPC Meeting Minutes, Prelim GDP q/q, Index of Services 3m/3,CBI Industrial Order Expectation
EUR: German Ifo Business Climate, Italian Retail Sales m/m
USD: OFHEO HPI M/m, FOMC Statement, Federal Funds Rate, FOMC Press Conference

Aussie Dollar climbs to a 12 week high against the US Dollar

noreply@blogger.com (Jan Borgelt) — Mon, 23 Jan 2012 21:42:00 +0000

Australian Dollar: The Australian Dollar enjoyed some considerable upside movement yesterday, soaring above $US1.05 to a 12 week high against its US Counterpart. Despite data released locally which showed prices paid by Australian Producers rose at a slower than expected pace, the higher yielding currency was snapped up by investors driven by optimism out of Europe that Greece will reach a deal with its creditors to avoid a default. After earlier opening the day at a rate of 1.0477, the Australian Dollar covered some solid ground breaking through the 1.05 level to reach an eventual high of 1.0572. Opening this morning stronger at a rate of 1.0534, any continuation of positive economic outcomes out the US should lead to further support for the Australian Currency.

New Zealand Dollar: With little in the form of local economic data driving the direction of New Zealand Dollar of late, the Kiwi has again benefitted from improved stability out of Europe. In overnight happenings a meeting between finance ministers in Brussels, delivered some positive outcomes for assets deemed riskier in nature with Policy Makers working towards a bid to lighten Greece’s debt Burden. After enjoying a consistent upward run for most of the domestic session the New Zealand Dollar finally ran out of steam, reaching an eventual high of 0.8141 against its US Counterpart. This morning sees the Kiwi opening higher however struggling to hold onto gains above the 81 US Cents level, currently swapping hands at a rate of 0.8101.

Great British Pound: The Great British Pound remained relatively range bound yesterday trading between a tight 24-hour band of (1.5516 – 1.5601) against its US Counterpart. Despite the generally directionless session for the Nations Currency, the Sterling has come under some increasingly strong selling pressure recently given the string of soft data which has plagued the UK economy. Further compounding the woes of the Sterling investors remain cautious ahead of The Bank of England Minutes which are due release overnight Wednesday, which may signal the intensions of Policy Makers to provide the UK economy with further stimulus. Meanwhile this morning the Sterling opens weaker against 12 of it 16 major counterparties including the Australian Dollar (1.4769) and the New Zealand Dollar (1.9200).

Majors: Global equities struggled to make up their mind in overnight trade, with the S&P500 earlier rallying as much 0.5 percent before closing in the red around 0.8 percent lower. Hogging much of the market’s attention overnight were talks held in Brussels, where Finance Ministers met to discuss ways to fight the ongoing Fiscal Crisis which has threatened the stability of the broader 17 Nation EURO for the past 24 months. With Greece bargaining with bondholders over debt relief, the major news out the meeting involved the idea of Germany to boost the combined aid limit from 500 billion EUROS which would see the establishment of both a temporary and a permanent bailout fund run alongside each other. The beefed-up funds would essentially serve as a stronger fire-wall should borrowing costs escalate. Whatever was said overnight investors liked what they heard with the EURO gaining well over a cent and after trading between a 24 hour range of ( 1.2874 – 1.3052 ) opens this morning surprisingly back above the 1.30 level, currently trading at a rate of 1.3019. Meanwhile in the US overnight, reporting season has continued without a hitch with investors keen to see the underlying GDP figures due for release later in the week to ascertain whether the string of solid data releases over the past quarter has translated into actual real growth for the US economy. On the currency front the US Dollar also appreciated overnight, opening stronger against the Japanese Yen this morning at a rate of 77.006

Data releases:
AUD: CB Leading Index m/m
NZD: No Data Today
JPY: Overnight Call Rate, BOJ Press Conference, Monetary Policy Statement
GBP: Public Sector Net Borrowing
EUR:French Flash Manufacturing Index PMI, French Flash Services PMI, German Flash Manufacturing Index PMI, German Flash Services PMI, ECOFIN Meetings, Industrial New Orders m/m
USD: Richmond Manufacturing Index

Aussie Dollar opens stronger at a rate of 1.0480

noreply@blogger.com (Jan Borgelt) — Sun, 22 Jan 2012 21:30:00 +0000

Australian Dollar: Following a relatively flat start to the day in which local equity markets gained around half a percent, the Australian Dollar weakened slightly against its US Counterpart reaching a later afternoon low of 1.0382. Despite its slow start, the Australian Currency came to life late in the US Session, well supported by better than expected European Bond Sales which have temporarily eased concerns over the regions ongoing fiscal crisis. Following the auction the Australian Dollar managed to reach an overnight high of 1.0487, capping a week in which the local currency finished higher to record its fifth consecutive week of gains, its longest winning streak since April 2011. Opening this morning around half a cent stronger at a rate of 1.0480, the local economic calendar is highlighted this week with Inflationary Data due for this release Wednesday.

New Zealand Dollar: The New Zealand Dollar continued its recent appreciation against its US Counterpart on Friday as it opens stronger this morning currently swapping hands a rate of 0.8059. After drifting sideways for much of the local session, overseas investors snapped up the higher yielding currency, driving it to an overnight high of 0.8062. Kick starting the rally late in offshore trade, France and Spain successfully sold 14.6 billion EURO’s worth of bonds, which has again seen borrowing costs drop significantly for the second consecutive bond auction. Looking ahead this week the New Zealand Dollar has done very well to sustain gains above 80 US Cents as investors await an interest rate decision which is expected out of the Bank of New Zealand on Thursday, the Central Bank is widely tipped to maintain the current benchmark cash-rate at 2.5 percent

Great British Pound: In a report released Friday, UK Retail Sales rose in December by 0.6 percent, matching the forecast of most economists. Combined with some positive bond auctions out of Europe, the Great British Pound enjoyed some upside on Friday rallying over a full cent to reach an eventual high of 1.5571 against its US Counterpart. With local GDP expected for release on Wednesday attention is likely to remain on domestic happenings over coming days. Capping what can only be described as an overall positive session for the Sterling, the Great British opens stronger this morning against the Greenback (1.5571) and the New Zealand Dollar (1.9303), however flat against the Australian Dollar at rate of 1.4847.

Majors: Global equities gained half to a full percent on Friday as Spain and France both successfully sold 14.6 billion EURO worth of bonds. With lower borrowing costs temporarily sidelining fears of further fiscal and debt contagion, Europe has for the early parts of this year showed some very real signs of stabilizing. Following the successful auction, the EURO received some much needed support and after reaching an earlier low of 1.2886 against its US Counterpart was snapped up by investors reaching an eventual high of 1.2985. Running into some stiff resistance around the 1.30 Level, the medium-term outlook for the 17-Nation currency still remains relatively bearish. In the US on Friday evening a handful of data releases, in particular The Philly Fed Manufacturing Index and December CPI Figures both came in below forecast with a report due out later this week expected to show annualised growth figures of 3 percent. With reporting season also continuing this week, the US Recovery story is slowing starting to gain pace despite the strong headwinds it continues to experience out of Europe. Meanwhile this morning the US Currency opens stronger against the Japanese Yen at a rate of 76.959.

Data releases
AUD: PPI q/q
NZD: No Data Today
JPY: No Data Today
GBP:No Data Today
EUR:German Import Prices m/m
USD: No Data Today

Australian economy loses 29,300 jobs in December...

noreply@blogger.com (Jan Borgelt) — Thu, 19 Jan 2012 21:57:00 +0000

Australian Dollar: The Australian economy lost 29,300 jobs in December, a report from the Australian Bureau of Statistics showed yesterday, as a strong Australian Dollar and growing economic concerns around the globe continue to hit the local economy. Although the rate of unemployment remained steady at 5.2%, this figure indicated a continuation in job losses that has averaged 7,000 per month in the final quarter of 2011. With these figures adding fuel to speculation of a further interest rate cut by the RBA in February, the Australian Dollar fell from earlier highs around 1.0430 to levels below 1.0380 before recovering to consolidate around the 1.0400 handle. Heading into the offshore session, better than expected demand for European government bonds helped offset fears of government default and bolstered sentiment, carrying the Aussie to 1.0430. Opening this morning at 1.0410, focus for the Aussie into the end of the week will be Chinese Flash Manufacturing PMI due out later today as well as ongoing talks in Greece this evening.

New Zealand Dollar: The New Zealand Dollar shed around 40 basis points yesterday after it was reported consumer prices fell by 0.3% in the final quarter of last year. Sinking from opening highs above 0.8070 the Kiwi soon found levels closer to 0.8020 as investors began to speculate lack of inflationary pressures in New Zealand would provide the central bank with further justification to loosen monetary policy. Trailing to a session low of 0.8010, improved sentiment surrounding the European Debt Crisis helped the Kiwi find support and limit downside movement in offshore trade. Remaining range-bound between 0.8000 and 0.8030 the local unit opens for the final day of the week at 0.8020. Despite weak unemployment figures from across the Tasman the New Zealand Dollar still opens this morning weaker against its Aussie counterpart at 1.2960 (0.7716).

Great British Pound: It was a quiet day in regards to the UK's economic calendar and thus the Great British Pound was forced to derive its value from international events. Trading in a quiet range during Asian hours, Sterling began to move higher as a switch to European trade brought improved risk sentiment following two successful bond auctions in Spain and France. With demand for the Greenback weakening, the Pound moved from earlier levels around 1.5430 to touch eventual highs close to 1.5490. Opening here this morning, investors will be keeping a close eye on Retail Sales figures due for release this evening as well as ongoing developments in its neighbouring continent. Despite improved risk sentiment, recent profit taking has seen the Pound recover from lows against the Australian and New Zealand Dollars, to 1.4860 and 1.9270 respectively.

Majors: The Euro Dollar has reached it highest level in two weeks after Spain raised more than its maximum target at a long-term debt sale overnight. Moving from earlier levels around 1.2860 the Euro rallied decisively above 1.2900, also helped along by another bond auction in France, where the recently downgraded country successfully raised almost 9.5 billion euros. Across the pond, the US Dollar weakened against the majority of its major trading partners as risk sentiment improved following the two bond auctions in Europe, as well a drop in unemployment claims in the world's largest economy. Rallying above 1.2950 the Euro sits this morning at fresh two-week highs of 1.2960 and the Greenback, despite a fall in the Dollar Index, has managed to gain ground against the Japanese Yen where it trades at 77.15.

Data releases
AUD: Import Prices q/q
NZD: No Data Today
JPY: All Industries Activity m/m
GBP: Retail Sales m/m
EUR:German PPI m/m
USD: Existing Home Sales

Aussie Dollar rallies overnight...

noreply@blogger.com (Jan Borgelt) — Wed, 18 Jan 2012 21:30:00 +0000

Australian Dollar: An increase in local consumer sentiment provided the Australian Dollar with a mild degree of support during local trading hours yesterday. The survey conducted by Westpac showed a 2.4% increase in the index, after last month’s -8.3% reading and the Aussie consolidated slightly above opening levels at 1.0380. While the Australian Dollar managed to rally confidently above 1.0400 in the offshore session as a result of improved sentiment in Europe and the US, more noteworthy at this stage is a staggering 27 year high against the Great British Pound. As the UK’s economy struggles to recover from the Global Financial Crisis and now the effects of the European debt saga, Australia’s economy is forging ahead helped along by continuing growth in China. Touching 0.6796 the night before last, the Aussie rallied again overnight helped by an increase in UK unemployment, briefly edging above 0.6780. Falling back slightly this morning the Aussie Dollar buys 67.55 pence and 104.25 US cents. We expect a range today of 1.0360 – 1.0460

New Zealand Dollar: The New Zealand Dollar has tracked the Euro higher overnight as the mood on global markets was lifted by an International Monetary Fund’s bid to boost its lending capacity, improved US data, and progress on Greek write-down talks. After spending the local session trading steadily higher through 80 cents to 0.8030, a switch to European hours soon saw a push through to an eventual high near 0.8080. Opening this morning at 0.8070, the local Consumer Price Index is due out shortly where the market expects a steady 0.4% increase for final quarter of 2011. We expect a range today of 0.8010 – 0.8100

Great British Pound: Unemployment in the United Kingdom rose to a 16 year high in November, a report released last night revealed. Whilst economists were predicting an increase in the unemployment rate to 8.3% it was shown to have increased to 8.4%, although jobless claims only rose by 1,200. Sterling, which is already heavily sold against the Greenback, did not give up any ground on the news and remained above 1.5330. It did however drop to 1.1980 against the Euro and 1.4745 against the Australian Dollar. Improved risk sentiment surrounding the Euro zone has helped Sterling reclaim some ground trading this morning at 1.5440 against the Greenback, 1.4800 against the Aussie and 1.9120 against the Kiwi. We expect a range today of 1.4730 – 1.4870

Majors: The Euro has rallied in the overnight sessions, first poking its head above 1.2800 verses the Greenback when the International Monetary Fund (IMF) announced it would be willing to expand its lending facility by another $500 billion. In addition to this, a Greek finance ministry official has been quoted to the effect a deal could be reached with private bond-holders, as to the terms and conditions of a bond swap, by the end of the week. The 17-nation currency rallied to a session high of 1.2860 off the back of this speculation and opens this morning just below at 1.2850. Contributing to the Euro’s push higher has been a weaker Greenback as broadly improved risk sentiment squashed demand for safe-haven assets. Although not quite reaching expectations, US Industrial Production still increased by 0.4% last month and confidence among U.S. homebuilders rose this month to the highest level since June 2007. unsure which way to break, the safe haven pair of the US Dollar vs the Japanese Yen has traded in a narrow range between 76.65 – 76.85.

Data releases:
AUD: Unemployment Rate; Employment Change; MI Inflation Expectations
NZD: CPI q/q
JPY: No data due for release
GBP: Nationwide Consumer Confidence
EUR: Current Account; ECB Monthly Bulletin
USD: Building Permits; Core CPI m/m; Unemployment Claims; Philly Fed Manufacturing Index

Westpac’s Consumer Sentiment survey due for release this morning...

noreply@blogger.com (Jan Borgelt) — Tue, 17 Jan 2012 21:31:00 +0000

Australian Dollar: Risk was back on the table yesterday and the Australian Dollar rallied higher along with other commodity linked currencies. After starting the day trading just above 1.0300, the Aussie soon set forth on a rally towards 1.0400 after it was announced Chinese economic growth was higher than anticipated in the 4thQuarter of 2011. With China being Australia’s biggest trading partner, continuing growth in the emerging economy bodes well for Aussie exports and positive sentiment saw the local unit move towards 1.0390 initially, eventually hitting highs near 1.0440. Risk sentiment remained positive offshore thanks to economic sentiment in Germany and better than expected bond auctions in Spain and Greece, although positive manufacturing statistics from the US gave the Greenback a boost more so than risk sentiment in general. Trailing lower, the Australian Dollar opens this morning at 1.0360 ahead of Westpac’s Consumer Sentiment survey due for release this morning.

New Zealand Dollar: The New Zealand Dollar has been one of the strongest performing currencies over the past twenty four hours after better than expected Chinese data boosted sentiment yesterday afternoon. The Kiwi embarked on a solid move higher after it was announced the Chinese economy grew more than expected in the final quarter last year, reaching highs close to 0.7990 by the end of the local session. Heading offshore, risk sentiment remained positive throughout Europe and the NZD/USD hit highs above 0.8025. Unable to hold these gains it has slid back to earlier levels of 0.7990 against the Greenback ahead of a quiet day on the local calendar. Opening unchanged against its Australian counter-part, the Kiwi did lose some ground earlier in the day to 0.7680 before reclaiming loses to trade this morning at 0.7710.

Great British Pound: The Great British Pound has fallen against the Euro and has seen limited gains against the Greenback after annual inflation was shown to have fallen from 4.8% to 4.2% overnight. This weaker inflation number has heightened speculation the Bank of England may be convinced to loosen monetary policy further by expanding its quantitative-easing program. Sterling still managed to rally to 1.5400 against the US Dollar after bond auctions in Spain and Greece boosted risk sentiment, however it fell to lows of 1.2020 against the Euro as a result. Against the antipodean currencies Sterling is lower against the Aussie at 1.4770 and Kiwi at 1.9170, ahead of unemployment data from the UK this evening.

Majors: The Euro Dollar has gained ground against its US counterpart for the first time in three days after economic sentiment in Germany posted its biggest gain in the two-decade history of the index. The ZEW survey showed a gain of 32.2 points to minus 21.6 and the shared currency rallied to 1.2800 after pushing higher earlier in the day as a result of better than expected growth in China. Gaining momentum also from a fall in Spanish and Greek borrowing costs as well as an oversubscribed auction for the EFSF, investor concerns were soothed relating to the ability of European countries and the stability fund to raise debt. Unable to hold onto all of these gains, the Greenback reclaimed some lost ground as it was helped along by a much better than expected reading for manufacturing levels in the New York region. Stabilising around the 1.2730 mark it is here we open this morning with the Japanese Yen also paring daily gains after the New-York based manufacturing report. The safe-haven pair trade back around 76.80 ahead of the Producer Price Index report and Long-Term asset purchases from the US this evening.

Data releases:
AUD: Westpac Consumer Sentiment
NZD: No data due for release
JPY: Revised Industrial Production m/m
GBP: Claimant Count Change; Unemployment Rate
EUR: Italian Trade Balance
USD: PPI m/m; TIC Long-Term Purchases; Industrial Production m/m

Australian dollar stronger despite EU worries

noreply@blogger.com (Jan Borgelt) — Mon, 16 Jan 2012 21:34:00 +0000

Australian Dollar: The Australian Dollar gapped immediately lower yesterday morning as local traders corrected their positions following a string of credit downgrades out of Europe of Friday. Despite a local report which showed home loans rose in November by a greater than forecasted amount the Australian dollar was sold to reach a mid afternoon low of 1.0253 against its US Counterpart. With the US being closed as a result of a public holiday the Australian Currency did manage to pare back some of its earlier losses as it opens this morning at a very similar level to where it was yesterday at a rate of 1.0315. Looking ahead this week, unemployment figures due for release Thursday are the highlight of the Calender, with a positive reading potentially providing some further support around the 1.03 level

New Zealand Dollar: In what was a very uneventful day of trading for the New Zealand dollar, markets remained relatively subdued yesterday with the US enjoying a public holiday. With little in the form of local data to provide any real direction for the Kiwi, local equities lost around half-cent as investors digested the fall out of a handful of European credit – downgrades overnight Friday. Despite some ongoing speculation of further downgrades, the Kiwi maintained its tight trading range drifting between a rate of (0.7910 – 0.7965) against its US Counterpart. Whilst the New Zealand dollar appears well capped below the psychological 80 US Cents level in the medium it has certainly been one of the better performed currencies, appreciating over 5 percent against the Greenback over the past 4 weeks. Meanwhile this morning the New Zealand dollar opens stronger against its US Counterpart currently buying 79.42 US Cents.

Great British Pound: In data released yesterday U.K home sellers cut asking prices for a third straight month in January according to Rightmove Plc. With average property prices in England and Wales falling 0.8 percent from December it’s likely the property market will continue to face some very strong challenges in 2011. Despite the soft data the Great British Pound managed to advance against its US Counterpart and after falling to an earlier low of 1.5274, rebounded well to open this morning around half a cent stronger, currently swapping hands at a rate of 1.5320. In what was an overall flat session for UK markets the FTSE gained around 0.2 percent as US Markets enjoyed a long weekend. Meanwhile on the cross-rates this morning the Sterling opens unchanged against the Kiwi (1.9281) however slightly stronger against the Aussie (1.4860)

Majors:
It was again news flows out of Europe driving currency direction overnight as US Markets were closed given the Martin Luther King Public Holiday. In a further blow to Policy Makers who are trying desperately to ensure confidence throughout the region is restored ratings Agency Standard & Poors downgraded the creditworthiness of the Euro-Zone’s bailout fund by one notch to AA+. Following on from the downgrades of nine European nations on Friday including Austria and France such ratings cuts could potentially hurt the European Financial Stability Facility’s ability to raise cheap bailout money. Following the announcement the EURO was sold to an overnight low of 1.2625 against tis US Counterpart before recovering well to open this morning around 30 basis points higher at a rate of 1.2663. Helping the 17-nation currency recover some of the ground lost earlier, French borrowing costs surprisingly fell overnight in a successful bond auction which saw yields on one-year notes fall from 0.454 to 0.406 percent. Meanwhile in the US overnight the Greenback lost some mild ground against a handful of currencies including the Japanese Yen as it opens weaker this morning at a rate of 76.743.

Data releases
AUD: No Data Today
NZD: REINZ HPI m/m, NZIER Business Confidence
JPY: Tertiary Industry Activity m/m
GBP: Nationwide Consumer Confidence, CPI y/y, RPI y/y, DCLG HPI y/y, BOE Gov King Speaks, CB leading Index m/m
EUR:CPI y/y, ZEW Economic Statement, ZEW Economic Statement
USD: Empire State Manufacturing Index

Standard & Poor downgrades nine European Nations...

noreply@blogger.com (Jan Borgelt) — Sun, 15 Jan 2012 21:39:00 +0000

Australian Dollar: After starting the day at a rate of 1.0331 against its US Counterpart, the Australian Dollar enjoyed a relatively quiet day of trading during the domestic session, drifting around 30 basis points higher to reach an eventual high of 1.0367. Despite local equities finishing 0.4 of a percent stronger global risk-sentiment and demand for higher-yielding assets such as the Australian Currency was quickly eroded following the announcement that both France and Austria would be stripped of their Triple-A Credit Rating by Ratings Agency Standard and Poor. Falling as low as 1.0231, the Australian Dollar did manage to regain some of its earlier losses opening this morning around 20 basis points lower currently swapping hands at a rate of 1.0315.

New Zealand Dollar: The New Zealand Dollar experienced mixed fortunes on Friday, fairing a lot better that a handful of other major currencies, following the decision by ratings Agency Standard & Poor’s to downgrade nine European Nations including the powerhouse of France. After initially reaching an earlier high of 0.7954 against is US counterpart the subsequent deterioration in global risk sentiment saw the Nations currency shed just short of a full cent trading as low as 0.7864. Opening this morning at a rate of 0.7935 the New Zealand Dollar has continued to remain very resilient up around these levels. In what is shaping up as a relatively busy week on the economic Calender, despite its surprising strength up around the 79 US Cents Level any sustained gains above 80 US Cents appear unlikely in the short-term.

Great British Pound: The Great British shed around half a cent on Friday as it opens lower against its US Counterpart this morning at rate of 1.5307. Having traded between a 24 hour range of ( 1.5278 – 1.5367 ) on Friday the Sterling again fell victim to poor news flow from its European Neighbours in the form of Credit Downgrades for both France and Italy as well as seven other nations. Providing little support for the Pound, local data releases in form of PPI Input and Output for the month of December both disappointed the market coming in well below expectation. Meanwhile on the cross-rates this morning the Great British Pound opens lower against the Australian Dollar (1.4831) however stronger against a resilient Kiwi at a rate 1.9281

Majors: Global equities lost around half a percent on Friday after Rating Agency Standard & Poor downgraded nine European Nations, including France. With both France and Austria both losing their Triple- A Status, Germany is now the only remaining powerhouse which enjoys such a status. In an announcement aimed at calming markets German Chancellor Angela Merkel said that such Credit Downgrades simply re-enforced the need for European Policy Makers to double their efforts to resolve the ongoing debt crisis, ahead of further bond auctions set to kick off later this week. Following the announcement the EURO plummeted around one and half a cents and after trading as high as 1.2623 against its US Counterpart was immediately sold off to overnight low of 1.2623. With the gains witnessed last week now well and truly forgotten, the EURO looks shaky in the near-term with such a large drop emphasising the current lack of support between the 1.2650 – 1.2800 area. Benefitting from the subsequent shift in risk-sentiment the Greenback opens stronger against the Japanese Yen this morning at a rate of 76.865. Further adding to the recent string of strong data releases, US Consumer Sentiment Figures beat expectation on Friday coming in at 74.0 above the forecasted reading of 71.

Data releases
AUD: MI Inflation Gauge m/m, ANZ Job Advertisements m/m, Home Loans m/m
NZD: No Data Today
JPY: CGPI y/y, Household Confidence
GBP: Rightmove HPI m/m
EUR:German WPI m/m, ECB President Draghi Speaks
USD: Bank Holiday

European Central Bank leaves the official Cash Rate unchanged at 1 percent

noreply@blogger.com (Jan Borgelt) — Thu, 12 Jan 2012 23:26:00 +0000

Australian Dollar: Following a relatively flat start to the day the Australian Dollar came to life late in the afternoon session reaching an eventual high of 1.0377 against its US Counterpart. Driving the positive risk flows into the Australian Dollar Chinese Inflationary Data released came in just above forecast however speculation has continued to mount that the Chinese Government will at some stage in the medium-term seek to ease Policy to help spur growth. Giving back its earlier gains against the Greenback as it entered the offshore session, weak US data in the form of Unemployment claims and Retail Sales managed to erode some of the earlier optimism as the Australian Dollar managed to do the full circle opening flat this morning, around 20 basis points higher at a rate of 1.0331.

New Zealand Dollar: The New Zealand Dollar fell against its US Counterpart yesterday following a mixed day of trading for the Kiwi. Having started the day at a rate of 0.7967, the kiwi traded sideways for the majority of Asia’s session with local equities and commodity trades offering very little support for the Nations Currency. Whilst the kiwi did manage some upside movement reaching an overnight high of 0.7980 against its US Counterpart, the brief rally proved to be short lived following the release of US Retail Sales which disappointed the market with a reading of 0.1 percent against a forecasted estimate of 0.3. Meanwhile this morning we see the New Zealand Dollar open slightly weaker currently buying 79.40 US Cents and despite debt fears being slightly reduced across the Euro-Zone overnight the Kiwi has continued to run into stiff resistance around the 80 US Cents Level.

Great British Pound: In line with the majority of economists forecast, the Bank of England kept its benchmark cash rate unchanged overnight at 0.5 percent, as well keeping its target level of bond purchases at 275 billion pounds. In what was a very busy session of data releases out of the UK, Industrial Production and Manufacturing Figures both disappointed on the downside, failing to provide any real support for the Sterling which has remained under consistent selling pressure of late. After trading between a 24 hour range of (1.5278-1.5367) against its US Counterpart the Sterling did receive some support from its European neighbours with successful bond auctions out of Italy and Spain helping to temporary sideline ongoing debt-fears for the broader region. Meanwhile this morning with domestic conditions showing only minor signs of improvement the Sterling opens at a very similar level against the Greenback at a rate of 1.5338, however weaker against a stronger Aussie at a rate of 1.4843.

Majors: As expected the European Central Bank left the official Cash Rate unchanged overnight at 1 percent. When pressed on the likelihood of future interest rate cuts ECB President Mario Draghi remained non-committal, stating the ECB remained “ready to act” and that their monetary stance will remain accommodative. In positive signs for the markets overnight Draghi was also keen to point out that there have been some tentative signs of stabilization throughout the region over the course of the previous month. Following the announcement the EURO immediately rallied and after trading as low as 1.2698 against its US Counterpart, rebounded strongly reaching an eventual high of 1.2844. In further news flows out of the EURO- Zone Spanish and Italian borrowing costs declined in a well received bond auction adding further evidence to the argument that debt fears have subsided at least for the time being. Dampening the positive sentiment overnight, US Economic releases in the form of weekly unemployment claims and Retail Sales both came in well below expectation which did have a softening impact on global equities. Meanwhile this morning the Greenback opens weaker against the Japanese Yen at a rate of 76.748.

Data releases
AUD: No Data Today
NZD: No Data Today
JPY: M2 Money Stock y/y
GBP: PPI Input m/m, PPI Output m/,
EUR:Trade Balance
USD: Trade Balance, Import Prices m/m, Prelim UoM Consumer Sentiment, Prelim Inflation Expectations, FOMC Member Dudley Speaks

Fitch Ratings Agency warns of significant credit downgrades unless Europe Acts more aggressively to contain its debt.

noreply@blogger.com (Jan Borgelt) — Wed, 11 Jan 2012 21:34:00 +0000

Australian Dollar: In what was a relatively uneventful day for the Australian Dollar traders seemed unwilling to offer much support for the higher-yielding unit. With the local economic calendar looking very light on data over the coming days the Australian Currency drifted lower for much of yesterday’s session reaching a mid afternoon low of 1.0262 against its US Counterpart. As US and European markets opened for the day further comments from Fitch Ratings Agency warned of significant credit downgrades unless Europe Acts more aggressively to contain its debt. Opening this morning at a rate of 1.0304 the Australian Dollar has struggled to find any solid ground above the 1.03 level having traded between a very tight 70 Basis Point range for the past 24 hours.

New Zealand Dollar: Similar to local equities and commodity prices yesterday the New Zealand Dollar finished the day relatively flat. Having traded between a very tight 24-hour range of (0.7924 – 0.7962) against its US Counterpart yesterday, the New Zealand Dollar failed to cover any new ground on the upside. Keeping a lid on global risk sentiment overnight, the Beige Book Survey, released monthly on behalf of the US Fed Reserve showed the US economy expanded at a modest to moderate pace from late November through to the end of December. Coupled with further concerns that Europe is not doing enough to stem the ongoing debt crisis it appears unlikely the New Zealand Dollar will advance above the 0.80 level in the short-term. Meanwhile this morning the Kiwi opens at very similar levels to those seen yesterday, as it currently buys 79.59 US Cents.

Great British Pound: The Great British Pound opens significantly weaker this morning at a rate of 1.5317 against its US Counterpart, having lost more than a full US Cent overnight. UK Stocks followed the Sterling lower yesterday, led by a sell-off in utilities and energy companies. In what proved to be a wave of poor results released globally, the US Beige Book Survey disappointed as did EURO-Area GDP. In what ended up being an across the board sell-off for the Sterling, investors nervously await the fallout from the Bank of England Meeting this evening where Mervyn King is widely tipped to keep the official cash rate on hold at 0.50 percent. Meanwhile on the cross-rates this morning the Sterling opens lower also against the Aussie (1.4868) and the Kiwi (1.9241)

Majors: US Stocks Fell, Commodities lost ground as the S&P 500 slipped 0.1 percent in overnight trade. Starting in the US, in its Beige Book Business Survey released overnight US Federal Reserve Officials said that the US remained limited given a stagnant housing market and a sluggish Labour Sector. Officials labelled the growth of the US Economy as “moderate and modest” and despite unemployment dropping to 8.5 percent in December down from 9.4 percent a year earlier most industries remained reluctant to hire. Punctuating the optimism from earlier in the week the Greenback appreciated against the Japanese Yen opening stronger this morning at a rate of 76.856. Continuing the ordinary sentiment hanging over markets overnight, in news flows out of Europe Final GDP for the 17-Nation Area also disappointed, with the reading of 0.1 percent well below expectation. In addition to the weak reading further ground was lost following a statement out of Germany’s Federal Statistics Office stating that Europe’s largest economy probably shrank in the final quarter of 2011. With Ratings Agency Fitch also warning of further downgrades, the EURO not surprisingly lost ground against the Greenback yesterday and after trading between a 24 hour range of (1.2661 – 1.2789) opens noticeably weaker this morning at a rate of 1.2695, the lowest level seen in close to 15 months.

Data releases:
AUD: No Data Today
NZD: REINZ HPI m/m
JPY: Economy Watchers Sentiment, Prelim Machine Tool Orders y/y
GBP: Manufacturing Production m/m, Industrial Production m/m, Official Bank Rate, MPC Rate Statement
EUR:Industrial Production m/m, French CPI m/m, German Final CPI m/m, ECB Press Conference
USD: Retails Sales, Unemployment Claims

Aussie stronger on back of improved global risk sentiment as well as local building approvals...

noreply@blogger.com (Jan Borgelt) — Tue, 10 Jan 2012 21:19:00 +0000

Australian Dollar: Following a relatively flat start to the day the Australian Dollar came to life in mid afternoon trade, as it was pushed higher by improved global risk sentiment as well as local building approvals which beat market expectations. After starting the day at a rate of 1.0236 against its US Counterpart, consistent upside for the Aussie Dollar saw investors rallying behind the Nations Currency pushing it to an overnight high of 1.0350. With the Australian Dollar also being the major benefactor of strong US Data as well as upbeat US Corporate earnings, this morning sees the Higher-Yielding Currency open a full cent stronger against the Greenback currently swapping hands at a rate of 1.0323.

New Zealand Dollar: The New Zealand Dollar opens stronger against its US Counterpart this morning and is currently buying 79.42 US Cents. In what was a very positive session for the Kiwi, intraday demand for the Nations Currency was initially triggered by good news from China in the form of improved Chinese Trade Data which showed exports rose 13.4 percent last month. As the Kiwi entered the offshore session, investors drove the kiwi up even higher as it touched 0.7964, the highest level seen since November last year. In what has been a remarkable month for the Kiwi, the higher-yielding currency has now managed to appreciate close to 5 percent against its US Counterpart since mid-December last year.

Great British Pound: A UK House-Price Index released yesterday showed the property market continued to face serious strains as UK house prices fell 0.9 percent in December, the lowest level since July 2009. Despite the disappointing housing data however the Sterling did manage to advance yesterday, driven by a strong start to the US Corporate Earnings Season and an overall return to positive risk sentiment. Having started the day at a rate of 1.5460 against its US Counterpart the Great British Pound did manage some upside, trading as high 1.5500 late in the session. In what has been a relatively slow start to the year for the Sterling, the Nation’s currency opens noticeably lower against both the Australian Dollar (1.5002) and the New Zealand Dollar (1.9497).

Majors: US Corporate Earnings Season kicked off with a bang overnight, with US aluminium giant Alcoa announcing a full-year profit more than double the profit of the previous year. Adding to the already positive mood throughout markets, the S&P 500 advanced 0.9 percent yesterday to its highest level seen in five months. As anticipated the Greenback lost ground against 15 of its 16 major peers, with the exception of the Japanese Yen in which it opens stronger against this morning at a rate of 76.8050. In news out of China overnight fuelling bets that the Government will shortly undertake an easing stance towards Monetary and Fiscal in an attempt to spur growth, Trade Balance figures showed that import growth slowed to two-year low in December. With the market clearly benefitting from stronger US Fundamentals of late as well as a lack of focus on Europe, the EURO also advanced against its US Counterpart and after trading between a 24-hour range of (1.2742 -1.2817), opens slightly stronger this morning at a rate of 1.2789. Looking ahead this evening attention will likely turn to EURO-Zone GDP Figures with the final quarter of 2011 tipped to return a very modest growth figure of 0.2 percent.

Data releases
AUD: No Data Today
NZD: No Data Today
JPY: Leading Indicators
GBP: Trade Balance
EUR:Final GDP q/q
USD: Beige Book

Retail Sales numbers well below expectation...

noreply@blogger.com (Jan Borgelt) — Mon, 09 Jan 2012 21:35:00 +0000

Australian Dollar: Hopes that a November rate cut would spur Consumers into further spending measures were dashed yesterday when Retail Sales for the month came in well below expectation, showing a turnover of Zero Percent, well short of the forecasted figure of 0.6 percent. Dampening local sentiment, investors moved away from the Australian Dollar throughout intraday trade, dragging the Nations currency to a late afternoon low of 1.0144 against its US Counterpart. As the Aussie moved into offshore trade however earlier losses were erased with US Stocks advancing before the start of earnings season. In an overall mixed session for the higher-yielding currency the Australian Dollar appears well supported around the 1.02 Level, opening slightly stronger this morning at a rate of 1.0236.

New Zealand Dollar: In Statistics released yesterday New Zealand’s Trade Balance widened in November, as official figures showed an overall trade deficit of $308 Million which was slightly larger than the expected reading of $280 Million. Following the release, the New Zealand Dollar remained quite subdued for much of the local session remaining range-bound ahead of what proved to be an evening of substantial gains for the Kiwi. Having started the day at a rate of 0.7793 against its US Counterpart, investors snapped up the local Unit driving it to an overnight high of 0.7876. Opening this morning around 70 basis points stronger at a rate of 0.7875 short-term directions are most likely to be dictated by offshore events particularly the ongoing Policy discussions out of Europe.

Great British Pound: The Great British Pound followed local equities lower yesterday trading as low as 1.5395 against its US Counterpart. With the FTSE 100 falling 0.7 percent, UK Stocks managed to lose ground for the third time in four days. As the Sterling continues to fall victim of European Debt-Crisis Concerns, attention is likely to return to domestic happenings this week, with a wide range of data releases expected, highlighted by an Interest Rate decision on Thursday. Despite a mixed session for the Sterling, earlier losses were reversed late in the day as the Great British Pounds opens at a very similar rate to where we saw it yesterday, currently swapping hands at a rate of 1.5452 against its US Counterpart.

Majors: In a meeting held in Brussels overnight German Chancellor Angela Merkel and French President Nicholas Sarkozy signalled that Euro-area Leaders may complete their new budget rulebook a month early by the 30th of January. Whilst discussions did stem from previous EU Summit talks of increased fiscal unity, the latest meeting has again done little to provide any substantial direction for investors. In currency movements overnight the EURO did recover well from the jitters seen earlier in the week, trading as high as 1.2784 against its US Counterpart, opening this morning around 80 basis points stronger at a rate of 1.2762. Whilst in Europe, in what is shaping up as an eventful week for the EURO-Zone an interest rate decision is expected out of the ECB on Thursday where new President Mario Draghi has signalled a willingness to become even more expansionary towards Monetary Policy moving forward. In news flows out of the US, Consumer Credit for the month of November surged to its highest level in almost a decade, showing households are optimistic to take on increased debt levels. With US Fundamentals continuing their recent strength, the Dow Jones rallied 0.3 percent overnight ahead of the earning season due to commence this evening. Meanwhile this morning the US Dollar opens relatively flat against the Japanese Yen at a rate 76.850

Data releases
AUD: Building Approvals m/m
NZD: Building Consents m/m
JPY: No Data Today
GBP: BRC Retail Sales Monitor y/y
EUR:French Industrial Production m/m
USD: IBD/TIPPP Economic Optimism, Wholesale Inventories m/m, FOMC Member Williams Speak, FOMC Member Pianalto Speaks

Unexpected drop in US unemployment rate...

noreply@blogger.com (Jan Borgelt) — Sun, 08 Jan 2012 21:35:00 +0000

Australian Dollar: The Australian Dollar traded sideways for the majority of Fridays Session with investors seemingly unwilling to push it even higher, given its recent strong start to 2012. Despite strong US non-farm payroll data surprising the market on the upside, the unexpected drop in the US Unemployment Rate was not enough to stop the slide of the Australian Dollar as investors sold the Higher-yielding asset to reach an eventual low of 1.0201 against its US Counterpart. With the market facing some strong headwinds out of Europe in the coming days and Local Retail Sales due for release this morning at 11:30am, volatilities are likely to continue for the Nations Currency. Meanwhile this morning we see the Aussie Dollar open around 40 Basis points lower against the Greenback currently trading at a rate of 1.0221

New Zealand Dollar: Despite Local equity markets recording minor losses throughout the domestic session on Friday the New Zealand Dollar remained relatively resilient against its US Counterpart trading between a 24 hour range of (0.7773 – 0.7837). In the absence of any local data the Kiwi was well supported off the back of better than expected labour market results in the US with the official unemployment rate falling to its lowest level since Feb 2010. Looking ahead this week Policy Makers from Europe are due to meet in Brussels this evening, where news-flows out of Europe are likely to dominate the short-term direction of the Kiwi as well as broader risk-sentiment. Today sees the New Zealand Dollar open at a very similar rate to where we saw it Friday, currently buying 77.94 US Cents.

Great British Pound: UK Stocks rallied on Friday, gaining 0.5 percent, snapping a two a day sell-off. Driving equities higher was a US Report showing unemployment fell close to a 3-year low, boosting optimism that the US recovery story is slowly gaining momentum. Following the announcement the Great British Pound rallied to a high of 1.5525 against its US Counterpart having reached an earlier low of 1.5375. In what is shaping up as a busy week for the Sterling, local data is highlighted by an Interest Rate decision expected out of the Bank of England on Thursday. Meanwhile this morning the Sterling opens slightly weaker against the Australian Dollar (1.5070) and the New Zealand Dollar (1.9759).

Majors: In a clear sign that the US economy has not only turned the corner, but is now starting to expand at a moderate rate, US Non-Farm Payrolls released on Friday surprised on the upside with 200,000 new employees entering the labour force, well up on the expected reading of 155 000. Despite the official unemployment rate falling to 8.5 percent, its lowest level seen since February 2009, the strong reading was not enough to push equity and currency markets into positive territory. Overshadowing the positive release it was again fears out of Europe that the Sovereign Debt-Crisis is worsening which drove global risk sentiment. With German Chancellor Angela Merkel and French President Nicolas Sarkozy due to meet for the first time this year in Berlin tomorrow ahead of the first EU Summit on January 30, negotiations to flesh out a new rulebook for fiscal discipline are likely take some time. Continuing the recent vulnerabilities of the EURO in which it has fallen a whopping 9.4 percent in the last six-months, the 17-nation currency lost further ground against its US Counterpart on Friday falling to an overnight low of 1.2696, opening this morning around 30basis points lower from the same time Friday at a rate of 1.2714.

Data releases
AUD: AIG Construction Index, HIA Home Sales m/m, Retail Sales
NZD: Trade Balance
JPY: Bank Holiday
GBP: Halifax HPI m/m
EUR:Sentix Investor Confidence, German Industrial Production, German Trade Balance, French Trade Balance, German WPI m/m.
USD: Bank Holiday

Euro falls to a 15 month low against the Greenback overnight...

noreply@blogger.com (Jan Borgelt) — Thu, 05 Jan 2012 22:00:00 +0000

Australian Dollar: Australia’s exports exceeded imports by A$1.38 billion in November, down from a revised A$1.42 billion surplus the previous month, the Bureau of Statistics said on Thursday. With markets somewhat disappointed the Australian Dollar drifted lower from opening levels above 1.0360 to find support around 1.0320 by mid-afternoon. Also weighing on the Aussie was a decision by the People’s Bank of China to fix the Yuan to the Dollar at a lower than expected level of 6.3115 causing a decline in Asian equity markets. Heading into offshore trade around 1.0320 the Australian Dollar dropped sharply as focused switched back to Europe’s banking sector and cost of borrowing. With French 10-year bonds hitting 3.29% and concerns for Spain’s exposure to bad loans, our local unit succumbed to the erosion of risk appetite that followed. Falling to 1.0240 we open just off these lows this morning with US unemployment tonight the main risk event for the Aussie.

New Zealand Dollar: The New Zealand Dollar spent most of its local session on Thursday in range-bound trade as markets remained tentative to take a position ahead of the French bond auction scheduled that evening and Friday’s US unemployment data. Sitting primarily between 0.7860 and 0.7880, this range was broken into the European session after France’s bond sale disappointed, falling initially to 0.7810. A few hours later, a private survey of US unemployment figures released ahead of the government survey tonight saw a much larger than expected increase to the labour force. The Greenback rallied off this news and the Kiwi was pushed momentarily below support at 0.7800. Holding right on these levels this morning, the New Zealand has made some marginal ground on its rival across the Tasman as soft trade balance figures for Australian weakened its dollar and the Kiwi currently buys 0.7616 Aussie cents.

Great British Pound: The UK’s services sector posted an impressive purchasing managers' index (PMI) overnight of 54.0 greater than both last month’s figure of 52.1 and expectations for this month of 51.6. With the service sector accounting for more than 70% of the nation’s economic output the British pound rallied on this news and in combination with a disappointing French bond auction, it reached 15mth highs against the Euro Dollar near 0.8250 (1.2121). Positive fundamentals from the United States however kept the Greenback strong and Sterling was not able to make such gains as it did against the Euro. Falling along with most other US counterparts, it fell to a low of 1.5470 before recovering slightly to start today at 1.5485. Slightly higher thanks to the decrease in risk sentiment, the GBP/AUD trades at 1.5100 and the GBP/NZD at 1.9840.

Majors: The Euro has fallen back to a 15 month low against the Greenback overnight as France’s borrowing costs rose at a local bond auction and a Spanish minister suggested Spain’s banks may face a higher bill for bad loans than originally thought. Falling from earlier highs around 1.2940, the single currency fell decisively through support at 1.2900 to levels around 1.2840 by the start of North American trading hours. The United States however has started the year on a more positive note and this trend continued when the survey of non-farm payrolls conducted by private firm ADP announced an additional 325,000 new jobs last month. With this positive number preceding tonight’s government figures the USD strengthened despite a slightly softer than expected ISM Non-Manufacturing PMI. This pushed the Euro even lower to finds support at 1.2785 and the USD/JPY back above 77.00 where it trades this morning at 77.20.

Data releases:
AUD: No data due for release
NZD: No data due for release
JPY: No data due for release
GBP: No data due for release
EUR: Retail Sales m/m ; Unemployment Rate; German Factory Orders m/m
USD: Non-Farm Employment Change; Unemployment Rate; Average Hourly Earnings m/m

Aussie Dollar at all time high against the Euro...

noreply@blogger.com (Jan Borgelt) — Wed, 04 Jan 2012 21:44:00 +0000

Australian Dollar: The Australian Dollar has decoupled from the Euro in the past 24 hours, holding its own above 1.0300 against the Greenback as the shared currency fell to support near 1.2900. In a session absent from local data, the Australian Dollar continues to take it lead from equity and commodity prices and as European banks found themselves back in the spotlight for less than desirable reasons the impact on European markets pulled the Aussie lower towards 1.0300. Moving into North American trade, another set of positive numbers from the world’s largest economy placated the US markets and in turn kept overall risk sentiment supported and the Aussie pushed back through to 1.0360. Also forging new all time highs against the Euro, the cross rate sits this morning at 0.8010 ahead of local Trade Balance figures due for release this morning.

New Zealand Dollar: The New Zealand Dollar has risen to five month highs against the Euro as debt worries once again shroud the region. Rising to 0.6090, the Kiwi also held on to most of Tuesday’s gains against the Greenback as positive US data kept risk sentiment supported, despite the resurfacing of European woes. Drifting lower from session highs around 79 cents the local unit still trades around 0.7870 in a week absent of any local data. Key for the Kiwi this week will be this Friday’s non-farm payrolls from the US and general risk appetite. Losing some ground against the Aussie it has fallen through short-term support and trades this morning at 0.7600.

Great British Pound: The Great British Pound has risen against the Euro Dollar for the first time in three days, pushing to its highest level in 15 months as concerns mount for the region’s debt crisis. Rising to levels near 0.8265 (1.2099) the Pound also held for the most part above 1.5600 against the Greenback as positive US factory orders kept risk sentiment supported despite European concerns. On a local front Construction PMI rose to 53.2 in December and Sterling rose to highs of 1.5660 off the back of this news, later settling around 1.5620 where we open this morning. On the cross rates, the Pound opens slightly lower against the Aussie at 1.5060 and marginally higher against the Kiwi at 1.9820.

Majors: The Euro has pared Tuesday’s gains as concerns for the region’s debt crisis resurfaced overnight. Italy’s biggest bank, UniCredit, proved to be the main catalyst after it announced it would sell 7.5 billion euros in shares at a heavy discount in order to boost their capital reserves. News reports also surfaced that the Spanish government assisted the Valencia region in an overdue payment to Deutche Bank AG; both headlines causing the Euro to slip decisively below 1.3000 to find support near the 1.2900 handle. On the flipside, the United States posted a solid 1.8% increase in Factory Orders for the month of November and these ongoing positive fundamentals in the US have helped support risk sentiment overall. The Euro opens this morning off session lows at 1.2935 and the safe haven pair, USD/JPY, trades at familiar levels around 76.70.

Data releases:
AUD: AIG Services Index; Trade Balance
NZD: No data due for release
JPY: Monetary Base y/y
GBP: Services PMI; BOE Credit Conditions Survey
EUR: Industrial New Orders m/m; PPI m/m
USD: ADP Non-Farm Employment Change; Unemployment Claims; ISM Non-Manufacturing PMI

Australian Dollar soars ahead of local Trade Balance figures tomorrow...

noreply@blogger.com (Jan Borgelt) — Tue, 03 Jan 2012 22:13:00 +0000

Australian Dollar: Asian stocks opened higher yesterday with the ASX gaining 1.1% during its first day of trade for the New Year. Buoyed by better than expected Chinese manufacturing data released over the weekend, these gains in the share market also boosted the Australian Dollar during its local session. After opening yesterday at 1.0220, the Aussie started heading north soon after the ASX opened at 10am, reaching levels near 1.0300 by the time trade moved into European hours. With markets choosing to focus on fundamentals ahead of the first euro meeting of 2012, overnight releases from both Europe and the US helped contribute to further improvement in risk appetite. Consequently we have seen the Australian Dollar soar to levels not seen since November 9 and we open this morning at 1.0375 ahead of local Trade Balance figures due to be released tomorrow. With nothing scheduled on the local calendar for today, the Australian Dollar will likely continue to derive its value from risk sentiment and offshore developments for the time being.

New Zealand Dollar: The New Zealand Dollar has risen to levels not witnessed in two months, as manufacturing reports from both Asia and the United States fuelled a strong start to equity markets. Pushing from opening levels yesterday around 0.7780 the Kiwi soon rallied above 78 cents and reached around 0.7830 before the switch to Europe. Positive unemployment figures from Germany also contributed to the risk rally offshore and this morning we open right on the cusp of 0.7900. With the Australian Dollar also trading off the back of risk sentiment the cross rate has settled into a predictably volatile yet narrow range. Moving primarily between 1.3110 and 1.3150 it currently sits right in the middle at 1.3130 (0.7616).

Great British Pound: Sterling has gained as a result of broad Greenback weakness stemming from a strong surge in risk sentiment so far this year. In a common trend yesterday it pushed from opening lows around 1.5500 to enter local trade around 50 points higher ahead of a local manufacturing report due for release. In line with reports from China and the US, UK manufacturing also improved however the index remains below the critical 50 mark which indicates expansion in the sector. Coming in at 49.6, it was enough to provide a slight boost and along with a continuing increase in risk sentiment Cable pushed to 1.5660, trading just off this at time of writing. Coming under obvious pressure against riskier assets, the Pound opens lower against both the Australian and New Zealand Dollars, this morning trading at 1.5090 and 1.9810.

Majors: The Greenback extended its decline on Tuesday as better than anticipated manufacturing data from the US contributed to improved risk sentiment following an expansion in China’s manufacturing sector announced earlier this week. The Euro Dollar began the day close to 1.2920 however a strong start to equities in the Asian session dampened the Greenback, pushing the Euro to 1.2980 by the beginning of local hours. With markets seemingly keen to focus on fundamental releases for the first week of 2012, both a decrease in the German unemployment rate and the aforementioned US manufacturing report added to the risk rally and the Euro continued to highs near $1.3070 against the Greenback, trading this morning at 1.3050. Also weighing on the US currency was the release of the FOMC minutes for the central bank’s December policy meeting, where they agreed to make public for the first time forecasts for the benchmark interest rate at their Jan. 24-25 meeting. As Japan remained on holiday yesterday this sentiment directed the safe-haven pair and the USD/JPY also moved lower to where it trades at time of writing at 76.66.

Data releases:
AUD: No data due for release
NZD: No data due for release
JPY: No data due for release
GBP: Construction PMI; Net Lending to Individuals m/m
EUR: French Consumer Spending m/m; Final Services PMI; CPI Flash Estimate y/y
USD: Factory Orders m/m;