Daily Forecast - 13/1/2010

:: Australian Dollar: The Australian Dollar opens lower today at 0.9210 after failing to hang onto its recent gains above US93 cents. The local unit took a tumble down to 0.9236 during Tuesday's domestic session after home loans data revealed a 5.6 per cent slump in November. The result was worse than the 0.5 per cent decline expected by most economists and cooled the heels of the many investors who are expecting the Reserve Bank to raise rates next month. During the offshore session the currency traded down to a low of 0.9170. On the cross-rates, the Aussie is down from the recent 2-year highs against the Euro (0.6350) and also lower against the Pound (0.5680).

- We expect a range today in the AUD/USD rate of 0.9180 to 0.9280

:: Great Britain Pound: Pound Sterling opens steady against the U.S. Dollar today at 1.6160. Gains on the pound were kept to a minimum overnight after a report showed Britain's property market lost momentum in December. A widening U.S. trade gap for December announced late in the session was also Greenback supportive. The range overnight was restricted to 1.6061 - 1.6194. Meanwhile, the pound has moved higher overnight against both the Australian Dollar (1.7550) and the New Zealand Dollar (2.1850).

- We expect a range today in the GBP/AUD rate of 1.7420 to 1.7590

:: New Zealand Dollar: The New Zealand Dollar opens marginally lower against the U.S. Dollar on Wednesday at 0.7390. The currency ran out of steam around the US74 cent mark during local trade yesterday after a business survey revealed that confidence stalled last month as the economy takes time to emerge from the recent global slowdown. The kiwi fell to an intraday low on Tuesday of US73.80 and an overnight low of US73.62. There is no major economic data due for release today and the local unit is likely to remain in consolidation mode on the back of weak overseas data, higher interest rates and firm commodity prices.

- We expect a range today in the NZD/USD rate of 0.7360 to 0.7425

:: Majors: The greenback and Japanese Yen rallied against several major currencies overnight after the U.S. trade deficit widened in November more than anticipated with a sharp rise in imports pointing to a rebound in global demand. The Dollar rallied against the Euro (1.4487) after the U.S. trade gap expanded to US$36.4bio - the highest since January - as both imports and exports grew. Meanwhile, the Japanese Yen (91.00) rallied across the board after news emerged that China will restrict lending to simmer growth, putting a temporary dent in risk sentiment.

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