Money and Forex Blog

:: Australian Dollar: Strong jobs data sent the Australian Dollar soaring above US87 cents yesterday. A total of 45,900 positions were created in June pushing the unemployment rate down to 5.1 per cent and reviving the prospect of another rise in official interest rates, possibly as early as next month. The Aussie hit an intraday high of 0.8740 shortly after the report and continues to attract buying interest on the back of improved risk sentiment and our yield advantage. During the offshore session, the unit moved between 0.8690 and a high of 0.8790 as the greenback weakened against several major currencies. On the cross rates, the Aussie is higher against the New Zealand Dollar at 1.2355.

- We expect a range today in the AUD/USD rate of 0.8720 to 0.8800

:: Great Britain Pound: As expected, the Bank of England has kept its key interest rate unchanged at a record low of 0.5 per cent. Pound Sterling opens marginally lower today at 1.5160 after a report on Thursday revealed UK house prices fell 0.6 per cent in June. Soft economic data may underpin the central bank’s commitment to retain the current levels of monetary stimulus which is likely to keep a lid on the pound over the near term. Meanwhile, the pound opens lower against both the Australian Dollar (1.7280) and the New Zealand Dollar (2.1360).

- We expect a range today in the GBP/AUD rate of 1.7240 to 1.7340

:: New Zealand Dollar: The New Zealand Dollar opens higher against its US counterpart today at 0.7090. During the local session the kiwi received a boost and briefly tracked the Australian Dollar after stronger-than-expected employment data across the Tasman. However, the gains were short-lived as there is strong technical resistance around the US71 cent mark. During the offshore session, the unit moved between a low of 0.7035 up to a high of 0.7102 on the back of improved risk sentiment after the IMF raised its outlook for global economic growth.

- We expect a range today in the NZD/USD rate of 0.7040 to 0.7105

:: Majors: The Euro hit fresh two-month highs overnight above 1.2700 after European Central Bank (ECB) president Mr Jean-Claude Trichet made positive comments about the economy. Risk appetite returned after Mr Trichet said “indicators suggest that a strengthening in economic activity took place during the spring”. As expected, the ECB kept interest rates on hold at 1 per cent. Meanwhile, the Japanese Yen is weaker across the board after the IMF raised its outlook for global growth, reducing the need for a safe haven. The big dollar opens at 88.29 against the Yen after a bigger-than-expected fall in weekly jobless claims. However, the jobless report also revealed that unemployment will be slow to decline.

:: Data Releases:
AUD: No data today
CAD: Housing Starts, June
EUR: No data today
GBP: Producer Prices, June
JPY: No data today
NZD: No data today
USD: Wholesale Inventories, May