Money and Forex Blog

:: Australian Dollar: Australia's Unemployment Rate (and general state of the economy) continues to be the envy of the western world as indicated by yesterday's release by the Australian Bureau of Statistics of official employment data for August. The figure indicated a drop in the unemployment rate by 0.2%, with the number for August coming in at 5.1% compared with the previous months reading of 5.3%. Both the full time and part time component of the release indicated a strong surge in the jobs and puts a strong case forward for a potential interest rate hike by the RBA before year end. On release of the data the local unit surged from 0.9180 smashing through the 92 cents level onto an eventual local high of 0.9238. During the offshore session the momentum continued with the Aussie briefly touching a four-month peak at 0.9276 after stronger than expected economic data releases in the United States. The unit opens at 0.9228 this morning.

- We expect a range today in the AUD/USD rate of 0.9200 to 0.9280

:: Great Britain Pound: Pound Sterling opens lower today against the greenback at 1.5426 after the Bank of England left its benchmark interest rate unchanged at a record low of 0.5 per cent and its quantitative easing program at GBP200bio. Sterling moved to an overnight low of 1.5375 after the UK's trade deficit widened to GBP8.7bio in July compared to GBP7.5bio in June. Exports slipped to GBP22.3 billion. Meanwhile, the pound continues to be outperformed by both the Australian Dollar (1.6700) and the New Zealand Dollar (2.1280).

- We expect a range today in the GBP/AUD rate of 1.6660 to 1.6720

:: New Zealand Dollar: Yesterday's release of the NZ Manufacturing Sales Index (a gauge of total value of sales in manufacturing) was Kiwi positive during the Asian yesterday and saw the dollar continue its recent upward trend against the Greenback. The report came in at 3.1% quarter on quarter, up 1.7% from its previous reading of 1.4%, resulting in the NZ Dollar hitting a local high of 0.7256. During the European and US sessions, the momentum continued with New Zealand Dollar hitting a high of 0.7287. Next Tuesday's all important Retail Sales number and Thursdays Reserve Bank of New Zealand's interest rate decision hold the key to NZ Dollar direction in the next week with positive outcomes potentially pushing NZDUSD through the crucial 0.73 cents level.

- We expect a range today in the NZD/USD rate of 0.7210 to 0.7290

:: Majors: Stronger-than-expected U.S. economic data could not prevent the greenback slipping towards 15-year lows against the Japanese Yen yesterday (83.48). The U.S. trade deficit narrowed 14 per cent in July to US$42.8 billion whilst weekly jobless claims fell by 27,000 to 451,000. The unemployment insurance claims data was the lowest in two months, easing concerns in the market that the world's largest economy will slip into a double-dip recession. Meanwhile, risk appetite towards the Euro was tempered somewhat as news emerged that Germany's biggest bank, Deutsche Bank AG, is looking at increasing its stake in Deutsche Postbank to help it meet rising regulatory capital requirements. The 16-nation currency opens lower today at 1.2690.

:: Data Releases:

• AUD: No data today
• CAD: Employment, August
• EUR: French Industrial Production, July
• GBP: Producer Prices, August
• JPY: GDP, Q2
• NZD: Terms of Trade, Q2
• USD: No data today