After starting at a rate of 1.0331 against its US Counterpart, the Australian Dollar enjoyed a relatively quite day of trading during the domestic session, drifting around 30 basis points higher to reach an eventual high of 1.0367. Despite local equities finishing 0.4 of a percent stronger global risk-sentiment and demand for higher-yielding assets such as the Australian Currency was quickly eroded following the announcement that both France and Austria would be stripped of their Triple-A Credit Rating by Ratings Agency Standard and Poor. Falling as low as 1.0231, the Australian Dollar did manage to regain some of its earlier losses opening this morning around 20 basis points lower currently swapping hands at a rate of 1.0315.
- We expect a range today of 1.0240 -1.0350
New Zealand Dollar
The New Zealand Dollar experienced mixed fortunes on Friday, fairing a lot better that a handful of other major currencies, following the decision by ratings Agency Standard & Poor’s to downgrade nine European Nations including the powerhouse of France. After initially reaching an earlier high of 0.7954 against is US counterpart the subsequent deterioration in global risk sentiment saw the Nations currency shed just short of a full cent trading as low as 0.7864. Opening this morning at a rate of 0.7935 the New Zealand Dollar has continued to remain very resilient up around these levels. In what is shaping up as a relatively busy week on the economic Calender, despite its surprising strength up around the 79 US Cents Level any sustained gains above 80 US Cents appear unlikely in the short-term.
- We expect a range today of 0.7880 – 0.7970
Great British Pound
The Great British shed around half a cent on Friday as it opens lower against its US Counterpart this morning at rate of 1.5307. Having traded between a 24 hour range of ( 1.5278 – 1.5367 ) on Friday the Sterling again fell victim to poor news flow from its European Neighbours in the form of Credit Downgrades for both France and Italy as well as seven other nations. Providing little support for the Pound, local data releases in form of PPI Input and Output for the month of December both disappointed the market coming in well below expectation. Meanwhile on the cross-rates this morning the Great British Pound opens lower against the Australian Dollar (1.4831) however stronger against a resilient Kiwi at a rate 1.9281
- We expect a range today of 1.4790 – 1.4880
Global equities lost around half a percent on Friday after Rating Agency Standard & Poor downgraded nine European Nations, including France. With both France and Austria both losing their Triple- A Status, Germany is now the only remaining powerhouse which enjoys such a status. In an announcement aimed at calming markets German Chancellor Angela Merkel said that such Credit Downgrades simply re-enforced the need for European Policy Makers to double their efforts to resolve the ongoing debt crisis, ahead of further bond auctions set to kick off later this week. Following the announcement the EURO plummeted around one and half a cents and after trading as high as 1.2623 against its US Counterpart was immediately sold off to overnight low of 1.2623. With the gains witnessed last week now well and truly forgotten, the EURO looks shaky in the near-term with such a large drop emphasising the current lack of support between the 1.2650 – 1.2800 area. Benefitting from the subsequent shift in risk-sentiment the Greenback opens stronger against the Japanese Yen this morning at a rate of 76.865. Further adding to the recent string of strong data releases, US Consumer Sentiment Figures beat expectation on Friday coming in at 74.0 above the forecasted reading of 71.
- AUD: MI Inflation Gauge m/m, ANZ Job Advertisements m/m, Home Loans m/m
- NZD: No Data Today
- JPY: CGPI y/y, Household Confidence
- GBP: Rightmove HPI m/m
- EUR: German WPI m/m, ECB President Draghi Speaks
- USD: Bank Holiday