Money and Forex Blog

:: Australian Dollar: The Aussie Dollar has experienced quite the roller coaster ride over the past 24 hours, beginning with favourable employment figures yesterday which catapulted our local currency above 98 cents to reach session highs of 0.9844. An extra 49,500 jobs were created since the previous month and with the expectation far less at 20,200 we saw an instant jump of 70 pips and the Australian dollar closed local trade comfortably around 0.9840. As the US Dollar continued to suffer during London, markets watched as the Aussie was not to be deterred by milestones and rallied above 99 cents to its highest value since the floatation of the currency in 1983. Finding resistance around 0.9910 the rally was capped and following the release of US unemployment figures a rapid retracement saw AUD/USD fall back considerably to test support at 0.9785. Opening today back above 98 cents we currently sit at 0.9825 with the RBA Deputy Governor Ric Battellino due to speak later today at the Property Council of Australia's luncheon in Brisbane. Key employment data from the US is due overnight tonight and with the Aussie Dollar's propensity to explore territory not seen since flotation from the Greenback we can only wait and see if a parity party eventuates.

- We expect a range today in the AUD/USD rate of 0.9780 to 0.9880

:: Great Britain Pound: Another quiet Asian session for the Pound saw it enter London around 1.5870 however muted trade was not to continue for long. Seemingly undeterred by less than desirable Housing data, where house prices dropped a whopping 3.6% in the last month, markets focused on the interest rate announcement and accompanying monetary policy statement by the Bank of England. As expected rates were left on hold at 0.5%, though quantative easing measures was what the markets were watching and this was also left unchanged at 200B. Cable's reaction was a favourable one and a rally above 1.60 ensued as it became apparent investor's were partly expecting the BoE to inject a little more liquidity into is Asset Purchasing Program. Unable to escape the upcoming US unemployment figures GBP/USD slid back on the news and found support at 1.5830. Opening today at 1.5870 against the US Dollar this evening will bring with it UK Producer Price Index figures which is a leading indicator of consumer inflation and thus holds significant event risk. Despite an attempt at a recovery against the Aussie Dollar overnight the cross opens lower today at 1.6150; against the Kiwi we are relatively unchanged at 2.1160.

- We expect a range today in the GBP/AUD rate of 1.6100 to 1.6250

:: New Zealand Dollar: The New Zealand Dollar experienced some choppy but uneventful trade against the Greenback yesterday, but following a popular trend, rallied to new highs overnight. Moving from range-bound trade between 0.7510/40 the Kiwi pushed through resistance at 0.7550 to make an attempt at 76 cents. Denied the privilege by favourable US data highs near 0.7590 were reached before a familiar tumble was seen back below 75 cents to only find support at 0.7470. Profit-taking has seen the currency pair recover to trade around the 75 cent handle at the open of today's session. Against the Australian Dollar the Kiwi has also suffered recent losses spurred by the aforementioned Aussie employment figures. Back above 1.31 briefly overnight the antipodean pair start today just below at 1.3090.

- We expect a range today in the NZD/USD rate of 0.7450 to 0.7550

:: Majors: The Greenback continued its slide against most of the major currencies during Asia and Europe yesterday, with USD/JPY reaching new 15 year lows below 82.20. The currency pair slid from session highs above 83.00 as Japanese officials state Japan will not enter into currency devaluation for the sake of the country's exporters; Vice Finance Minister Sakurai said that the Yen's value is something that will be determined by the markets. The Euro also staged an impressive rally against the U.S Dollar overnight breaking through 1.40 barriers to reach highs above 1.4020 during European trade. Capitalising on US weakness, the single currency was also bolstered locally by impressive German Industrial Production as well as the ECB Press Conference where President Trichett stated European Banks were requesting less financing from the ECB than before. As widely expected, interest rates were kept on hold at 1.0% in the Eurozone. The Greenback's fall did manage to find a bottom however and upon the release of a larger than expected decrease in unemployment claims, the U.S. Dollar staged a retaliation. Climbing back to test resistance at 82.50 against the Japanese Yen the currency pair enters today's Asian session around 82.40 ahead of the release of the Bank of Japan's Monetary Policy Meeting Minutes. EUR/USD retreated dramatically, falling below 1.40 and finding support at 1.3860. Climbing back above 1.39, we enter today's session at 1.3920 with the German Trade Balance due for release this evening, and the much anticipated US Non-Farm Payrolls during the American session.

:: Data Releases:

• AUD: Deputy RBA Governor Battellino Speaks
• NZD: No Data Expected Today
• USD: Sep Employment Data & Aug Wholesale Inventories
• GBP: Sep PPI
• EUR: Aug German Trade Balance
• JPY: BoJ Monetary Policy Minutes & Aug Current Account