Daily Forecast 11/11/2009

:: Australian Dollar: The Australian Dollar opens steady against the greenback today at 0.9280. During local trade, the Aussie nudged a calendar-year high above US93 cents ahead of importer interest and profit taking which took the unit back down to 0.9270. Several major currencies have moved higher in recent days after the International Monetary Fund (IMF) said the U.S. Dollar was overvalued. An upbeat NAB business confidence survey also underpinned the local unit yesterday. During offshore trade, the Aussie moved between a low of 0.9254 up to 0.9315 as U.S. equities briefly touched a 13-month high. If domestic unemployment data comes in better than expected on Thursday, the local currency is poised to test new highs for 2010.

- We expect a range today in the AUD/USD rate of 0.9260 to 0.9360

:: Great Britain Pound: Pound Sterling opens marginally lower today at 1.6725 after hitting a 3-month high yesterday of 1.6843. The pound slid after Fitch Ratings said the U.K.'s credit rating is the most at risk among the top-rated nations. The sell-off down to 1.6600 was short-lived as Fitch later stressed there were no plans to change the U.K. rating. Meanwhile, the pound opens slightly lower against both the Australian Dollar (1.7980) and the New Zealand Dollar (2.2550).

- We expect a range today in the GBP/AUD rate of 1.7850 to 1.8060

:: New Zealand Dollar: The New Zealand Dollar opens steady today at US74 cents and continues to be supported as several major currencies moved higher in recent days after the International Monetary Fund (IMF) said the U.S. Dollar was overvalued. The kiwi hit an intraday high of 0.7460 on Tuesday after Statistics New Zealand revealed a 2.8 per cent increase in the value of electronic card transactions on higher consumer confidence. During the offshore session, the currency traded down to a session low of 0.7374. Greenback weakness, higher commodity prices and an increase in risk-appetite are set to underpin the kiwi near term.

- We expect a range today in the NZD/USD rate of 0.7340 to 0.7480

:: Majors: The U.S. Dollar edged higher overnight against the Euro (1.4970) after a fall in equity markets discouraged moves into higher yielding currencies. Intraday, Wall Street hit a 13-month high but at time of writing was only up 4 points. The Euro retreated from a 15-month high of 1.5019 overnight but is set to recapture those losses as the U.S. Federal reserve trails other central banks in raising borrowing costs. Meanwhile, Japan's current account surplus widened in September by 0.2 per cent to 1.57 trillion Yen as worldwide government stimulus spending increased exports. Against the Yen, the greenback opens at 89.77 after trading in a narrow 89.67 - 90.17 band over the last 24 hours.

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