Daily Forecast - 21/4/2010

:: Australian Dollar: The Australian Dollar opens higher today at 0.9310 after receiving a boost yesterday from the release of the Reserve Bank of Australia (RBA) April 6 board meeting minutes. The currency tracked steadily higher towards US93 cents throughout the domestic session as the minutes stated that this month's rise was a further step in the process indicating rates are likely to increase again soon. Overnight, the Aussie moved back above 0.9300 in early Europe and stayed there for the remainder of the offshore session. The Aussie is higher on the cross rates this morning and opens at 86.80 against the Japanese Yen.

- We expect a range today in the AUD/USD rate of 0.9290 to 0.9360

:: Great Britain Pound: Pound Sterling (1.5350) opens higher today after the U.K.'s inflation rate moved higher than economists' forecasts. Consumer prices increased 0.6 per cent in March for an annualised rate of 3.4 per cent - well above the Bank of England's target ceiling rate of 2 per cent. The pound moved higher after the report trading up to 1.5433 as the U.K. central bank may need to raise rates in the second half of the year. Meanwhile, the pound is lower against the Australian Dollar (1.6470) and steady against the New Zealand Dollar (2.1580).

- We expect a range today in the GBP/AUD rate of 1.6400 to 1.6500

:: New Zealand Dollar: The New Zealand Dollar opens at 0.7110 and has calmed down after a flurry of activity either side of yesterday's inflation data. The market was long heading into the data in anticipation of reading in excess of 0.6 per cent and the kiwi hit a high of 0.7140. March quarter CPI rose a lower-than-expected 0.4 per cent and the kiwi fell sharply back to 0.7090. The annualised rate of inflation now stands at 2.0 per cent suggesting the Reserve Bank of New Zealand will not be in a hurry to raise interest rates. During the offshore session, the unit moved higher against a softer Japanese Yen and opens at 66.30.

- We expect a range today in the NZD/USD rate of 0.7090 to 0.7145

:: Majors: Risk and yield demand were back on the minds of traders last night pushing the Japanese Yen and the greenback lower as central banks in Canada and Australia indicated rates may need to rise to contain inflation. The Yen suffered its biggest intraday loss in almost a month hitting an overnight low of 93.38 against the greenback. The Canadian Dollar moved higher against its U.S. counterpart overnight (0.9979) after the Bank of Canada indicated that it might be the first G7 nation to raise rates due to faster-than-expected economic growth and inflation. Meanwhile, the Euro opens marginally lower at 1.3430.

:: Data Releases: