:: Australian Dollar: The Australian Dollar opens higher today at 0.8625 and is buoyed by improved risk sentiment after the release of stronger than expected U.S. economic data overnight. After hitting an intraday high of 0.8630 on Tuesday, the Aussie was sold down beneath the US86 cent level as traders re-assessed the outlook for domestic interest rates. Yesterday's Reserve Bank Board minutes revealed the central bank is not in a hurry to lift interest rates anytime soon. In early European trade, the unit steadied around the 0.8595 mark before surging higher during the New York session as traders moved into higher-yielding assets.

- We expect a range today in the AUD/USD rate of 0.8580 to 0.8680

:: Great Britain Pound: Pound Sterling has failed to hang onto its recent gains and opens today at 1.6483 versus the big dollar. In overnight trade, the pound moved from a high of 1.6656 down to a low of 1.6402 representing its biggest intraday decline in more than four weeks. Prompting the selling was strong US economic data and comments from Bank of England Governor Mervyn King that policy-makers are looking at lowering deposit rates paid to banks to hold reserves at the central bank. Meanwhile, the pound opens lower against both the Australian Dollar (1.9088) and the New Zealand Dollar (2.3360).

- We expect a range today in the GBP/AUD rate of 1.8950 to 1.9200

:: New Zealand Dollar: The New Zealand Dollar has held onto most of its recent sharp gains to open at 0.7046 against the U.S. Dollar. Improved risk sentiment continues to support the kiwi despite softer-than-expected economic data released earlier in the week. The unit hit an intraday high of 0.7025 on Tuesday before moving beneath the psychological US70 cent mark after Business NZ revealed in a report that local manufacturing activity came in at -4.8 per cent in the second quarter. Whilst manufacturing volumes actually rose 1.8 per cent, values were down as a result of lower prices. In overnight trade, the kiwi moved to a high of 0.7064 after stronger than expected US retail sales and producer prices encouraged traders to move into higher-yielding assets.

- We expect a range today in the NZD/USD rate of 0.6980 to 0.7080

:: Majors: The big dollar has rallied against several major currencies on the back of strong domestic economic data. The greenback opens at 91.01 against the Japanese Yen after U.S. retail sales surged 2.7 per cent in August and producer prices rose twice as much as expected. Positive risk sentiment encouraged investors to offload the Yen and move into higher-yielding assets. Oil and base metals also moved higher whilst Wall Street rallied 56 points to a calendar-year high. Meanwhile, in Europe, German investor confidence rose to the highest level in more than three years in September, increasing to 57.7. The market had been predicting a rise to 60 which restricted Euro gains for an opening level of 1.4650.

:: Data Releases:

  • AUD: MI/WBC Leading Index, July
  • CAD: No data today
  • EUR: EZ CPI/Core CPI, August
  • GBP: ILO Unemployment rate, July
  • JPY: BoJ Monetary Policy meeting, Sept
  • NZD: No data today
  • USD: CPI/Core CPI, Industrial Production, Capacity Utilisation, July; Current Account, Q2.
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