Australian Dollar: The Aussie dollar pulled back from its early morning highs above 89 cents yesterday dipping to an intraday low of 0.8865 following slightly softer than forecast Home Loan data. The markets insatiable desire for the AUD resurfaced however as it bounced back to eventually exchange at an overnight high near 0.8950, its highest level since early August 2008. A fall in the Euro following softer than expected Euro-Zone GDP sees the AUD/USD exchanging back at 0.8895 this morning ahead of today's Australian employment report. Many economists are forecasting a slight rise in the headline unemployment rate from 5.8% to 5.9% or 6% as it is expected that the local economy shed around 10k jobs in September. A poorer result could tr igger a bout of selling with technical support around 0.8850 important for the short term direction of the Aussie dollar.

- We expect a range today in the AUD/USD rate of 0.8850 to 0.8950

Great Britain Pound: Early London traders sold the Pound Sterling down once again pushing it to a low of 1.5860 against the Greenback however solid buying emerging at this level. After several unsuccessful attempts to trade lower the GBP/USD finished the offshore session back at 1.5945 following a late reversal in North American equity markets which at one stage were down quite considerably. It is expected the GBP could strengthen slightly heading into this evenings Bank of England meeting as short term speculators look to square up some recent short positions. There was some respite on the GBP/AUD cross overnight as it bounced back from an early sell off that saw it exchange as low as 1.7750 to open this morning around 1.7920.

- We expect a range today in the GBP/AUD rate of 1.7850 to 1.8000

New Zealand Dollar: With no New Zealand economic data for direction the Kiwi followed the fortunes of the Australian dollar dipping to 0.7320 in intraday trade before rallying hard to a top near 74 cents in Europe. After testing the psychological 74 cent handle and failing to progress higher the NZD dropped quickly to 0.7320 and opens this morning at 0.7345 against the Greenback. As the speed of the global recovery came into question following a downward revision in Euro-Zone Q2 GDP the appeal of the Kiwi dollar diminished somewhat. Attention now shifts to the European and English central bank meetings this evening with neither expected to change interest rates although the accompanying rhetoric is sure to move currency markets.

- We expect a range today in the NZD/USD rate of 0.7310 to 0.7385

Majors: The Euro lost some of its appeal overnight with selling around 1.4730 capping any further advances against the Greenback. Second quarter economic growth figures as measured by GDP were revised lower to -0.2%, more than consensus forecasts for a -0.1% contraction outweighing any benefit from a rise in German Factory orders. Growth prospects for the Euro-Zone were scaled back somewhat and with the Dow Jones Industrial finishing slightly in the red the Greenback firmed against most majors. This morning sees the big dollar exchanging at 88.65 against the Japanese Yen and at 1.4680 Euro ahead of this evenings ECB interest rate meeting.

Data Releases:

  • AUD: Sep Employment Data
  • NZD: No Data Expected
  • USD: Aug Wholesale Inventories & Weekly Jobless Claims
  • GBP: BoE Interest Rate Meeting
  • EUR: ECB Interest Rate Meeting & Aug German Industrial Production
  • JPY: Aug Trade Balance & Aug Adjusted Current Account
  • CAD: Sep Housing Starts

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