Money and Forex Blog

:: Australian Dollar: In the absence of any major economic data yesterday, the Australian Dollar spent most of the domestic session trading the range between 0.9350 and US94 cents. The Melbourne Institute survey of consumer inflationary expectations rose to 3.1 per cent in September from 2.8 per cent in August as labour market conditions continue to show signs of improvement. It was more of the same offshore with the Aussie hitting a high of 0.9390 on the back of stronger base metals prices. Gold is trading at another record high above US$1,274/ounce.

- We expect a range today in the AUD/USD rate of 0.9330 to 0.9410

:: Great Britain Pound: Pound Sterling opens little-changed against the greenback at 1.5617 and remains under pressure after UK retail sales unexpectedly fell last month. Sales in August fell 0.5 per cent from July heightening concerns that economic growth is slowing. The pound hit an overnight low of 1.5537 and plunged to a seven-week low against the Euro (0.8370). Also weighing on the currency last night was a separate report showing UK factory orders declined in September for the first time in five months. Meanwhile, the pound is steady against the Australian Dollar (1.6660) and stronger against the kiwi (2.1570).

- We expect a range today in the GBP/AUD rate of 1.6600 to 1.6685

:: New Zealand Dollar: The New Zealand Dollar opens lower at 0.7230 after yesterday's decision by the Reserve Bank of New Zealand (RBNZ) to leave interest rates on hold at 3 per cent. RBNZ governor Mr Alan Bollard noted that the path for future rate hikes would be "more moderate" than was projected in recent statements. The kiwi worked its way lower throughout the domestic session as the market now expects rates to remain on hold for the next several months. During the offshore session the unit moved between a high of 0.7255 down to a low of 0.7215. The kiwi is also being outperformed by the Australian Dollar and opens this morning at 0.7720.

- We expect a range today in the NZD/USD rate of 0.7210 to 0.7255

:: Majors: The US Dollar had a mixed session overnight after weaker-than-expected manufacturing data in the Philadelphia region. The Federal Reserve Bank of Philadelphia's general economic index came in at minus 0.7 for September causing the greenback to weaken against several currencies. The Euro hit a five-week high above 1.3100 after a successful Spanish bond auction of up to 4 billion Euro in 10 – 30 year securities. Whilst it is early days, markets have been hesitant to test the resolve of the Bank of Japan after Wednesday's intervention into currency markets for the first time in 6 years. The greenback opens today at 85.70 and remains sharply higher compared to the 15-year lows beneath 83.00 earlier in the week. Japanese Prime Minister Naoto Kan said yesterday that his government is ready to take "decisive measures".

:: Data Releases:

• AUD: No data today
• CAD: No data today
• EUR: Euro Zone, Producer Prices, August
• GBP: No data today
• JPY: No data today
• NZD: No data today
• USD: Uni of Michigan confidence, September