AUD/USD at three week high

Australian Dollar:

The Aussie opens stronger this morning and moves into the weekend on a high note witnessing its highest levels in the past three weeks. With the absence of any local data prints yesterday the AUD looked overseas for direction throughout the trade session. Intraday lows of AUD/USD 0.7164 were countered by highs of 0.7271 overnight, and the Aussie maintained these levels into the morning where it opens well above the 72 US cent level at AUD/USD 0.7256. On the cards today we have domestic home loans data for August coming up for announcement where forecast is set for a considerable increase when compared to the previous months reading. A strong result here could see a final rally for the AUD to close off the week.

• We expect a range today of AUD/USD 0.7210 – 0.7290

New Zealand Dollar:

The NZ dollar has edged higher throughout yesterday’s trade with overseas stimuli being the main contributor to the local currency movements. With an empty local economic docket yesterday the Kiwi traded mostly sideways intraday, while then rallying overnight to see highs of NZD/USD 0.6698. With yet another day clear of any domestic announcements the local currency is expected to remain at the current levels into the weekend. Overseas there is some US data scheduled for release overnight that that may provide some movement for the NZD, however the announcements are only expected to have a light to moderate impact on the market.

Great British Pound:

Announcements made yesterday from the Bank of England regarding domestic interest rates saw the Cable plunge to overnight lows of GBP/USD 1.5268. The Bank of England announced that they had decided to keep rates steady at the record low of 0.5% which was no surprise, however dovish comments surrounding the outlook for local inflation resulted in the cable dropping considerably. Following that the pound sterling did manage to regain some ground against the Greenback to open higher at GBP/USD 1.5347, however still opens weaker when compared to its Aussie and Kiwi counterparts at 2.1150 and 2.3005 respectively.

• We expect a range today of GBP/AUD 2.1110 – 2.1190

Majors:

The Euro Dollar opens only a shade higher this morning at EUR/USD 1.1273 as negative information from both the Eurozone and the US take their toll on the currency pair. With the European Central Bank monetary policy meeting minutes being released yesterday it was revealed that there are some concerns in the region regarding downside risk to the economic recovery and inflation. The Federal Reserve also released some commentary yesterday regarding concerns for their own local inflation targets and figures due to global uncertainty. Upcoming today focus will be on import price data out of the US, and industrial production number out of Italy and France.

Data releases:

• All Currencies: IMF Meetings
• AUD: Home Loans m/m
• CAD: Employment Change, Unemployment Rate, BOC Business Outlook Survey
• EUR: French Gov Budget Balance, French Industrial Production m/m, Italian Industrial Production m/m
• GBP: Trade Balance, Construction Output m/m
• USD: Import Prices m/m, FOMC Member Lockart Speaks, Wholesale Inventories m/m, FOMC Member Evans Speaks