Daily Commentary - 18/09/2009

:: Australian Dollar: The Australian Dollar has held onto its recent spectacular gains and opens on Friday at 0.8710. The Aussie ended yesterday's local session at a new 13-month high of 0.8774 as stronger-than-expected economic data from the United States adds to signs the global economy is edging towards recovery. The positive tone continued during European trade ahead of a bout of profit-taking which took the unit briefly beneath US87 cents late in the New York session. There is no major data scheduled for release locally today which may keep a lid on the Aussie for the time being.

- We expect a range today in the AUD/USD rate of 0.8675 to 0.8760

:: Great Britain Pound: Pound Sterling opens weaker on Friday at 1.6435 after U.K. retail sales stalled during August as British shoppers kept their hands in their pockets and households continue to feel the squeeze from the recession. Overnight, the pound traded moved from a high of 1.6568 down to 1.6425 and is likely to remain under pressure over the near-term as the Bank of England considers increasing its bond purchase program as a way of keeping borrowing costs low. Meanwhile, the pound opens largely unchanged against the Australian Dollar (1.8860) and slightly stronger against the New Zealand Dollar (2.3150).

- We expect a range today in the GBP/AUD rate of 1.8750 to 1.8940

:: New Zealand Dollar: The New Zealand Dollar continued its ascent yesterday and opens at 0.7090 against the greenback. The kiwi hit a new 13-month high of 0.7156 as stronger-than-expected economic data from the United States adds to signs the global economy is edging towards recovery. In overnight trade, the kiwi traded between the afore-mentioned high of 0.7156 down to a low of 0.7079 during the New York session amid signs of profit-taking. Despite the lack of local economic data this week, yield-chasing investors have been keen to take the New Zealand Dollar higher.

- We expect a range today in the NZD/USD rate of 0.7040 to 0.7150

:: Majors: The big dollar opens steady against the Japanese Yen (91.00) after the Bank of Japan kept official interest rates at 0.1 per cent and pledged to maintain their emergency lending programs to banks and companies. The Yen hit an intraday low of 91.60 against the greenback after the Bank of Japan said in a statement that is still sees downside risks to growth. Meanwhile, there was more positive economic data released in the United States where housing starts rose 1.5 per cent in August, the highest level in nine months, for an annual rate of 598,000 dwellings and manufacturing in the Philadelphia region expanded more than forecast. The Euro had a quiet night by recent standards and opens on Friday at 1.4730.

:: Data Releases: