Daily Commentary - 2/10/2009

:: Australian Dollar: The Australian Dollar opens lower on Friday at US87 cents despite posting another 13-month high during yesterday's local trading session. The Aussie hit 0.8855 against its U.S. counterpart on the back of stronger commodities, in particular oil and base metals. However, profit-takers swooped and took the unit back towards US88 cents by mid-afternoon. During the offshore session, the Aussie moved beneath US87 cents after weaker-than-expected U.S. economic data cast doubts over the economic recovery. Looming large for the high-yielding currencies tonight is the all-important U.S. employment data which has the potential to disappoint a market that is looking for further signs of economic improvement in the world's largest economy.

- We expect a range today in the AUD/USD rate of 0.8620 to 0.8745

:: Great Britain Pound: Pound Sterling opens steady against the greenback today (1.5950) and higher against the Euro (0.9110) after the International Monetary Fund (IMF) raised its UK growth forecast for 2010. The IMF said gross domestic product will increase 0.9 per cent next year as the housing-market slump eases. The pound has steadied in recent days after hitting a four-month low of 1.5769 earlier in the week. The pound opens higher today against both the Australian Dollar (1.8333) and the New Zealand Dollar (2.2300).

- We expect a range today in the GBP/AUD rate of 1.8150 to 1.8440

:: New Zealand Dollar: The New Zealand Dollar opens lower this morning against the greenback at 0.7140 and remains underpinned by strong local economic data released earlier in the week, firm commodity prices and demand for high-yielding currencies. The kiwi paused for breath during local trade on Thursday and moved back under US72 cents. During the offshore session the unit traded as low as 0.7133 after a range of weaker-than-expected U.S. data releases. Local traders might be content to sit on the sidelines today in the lead-up to tonight's US employment data. Against its trans-Tasman rival, the kiwi opens at 0.8200.

- We expect a range today in the NZD/USD rate of 0.7060 to 0.7210

:: Majors: The Japanese Yen weakened against the greenback (89.66) yesterday after the central bank's Tankan report revealed that large businesses plan to cut spending in the next three months, delaying any sort of recovery from the recession. In the United States, economic data was mixed with pending home sales rising 6.4 per cent in August adding to signs of a recovery in the housing sector. However, this was offset by a rise in jobless claims and a September decrease in manufacturing activity. The Euro (1.4540) hit a 2-week low against the big dollar after European Central Bank President Jean-Claude Trichet said disorderly movements in exchange rates have adverse implications for economies. Meanwhile, economic data in China revealed yesterday that manufacturing expanded at the fastest pace in 17 month as the Purchasing Managers Index rose to 54.3. Readings above 50 indicate an expansion.

:: Data Releases: