Daily Forecast - 24/3/2010

:: Australian Dollar: The Aussie dollar continued to pull back in early offshore trade weighed down by persistent selling in EUR/USD to eventually find a bottom around 0.9135 against the Greenback. Investor confidence reappeared however following better than expected U.S housing data and comments about the possible removal of accommodative interest rates from Fed officials. U.S equity markets, commodities and riskier assets in general all rallied in North American trade to push the AUD/USD back towards the 92 cent handle. This morning sees the Aussie dollar open near its highs against the Greenback, Euro and Pound with technical resistance levels looming near on the topside.

- We expect a range today in the AUD/USD rate of 0.9150 to 0.9200

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:: Great Britain Pound: The Pound fell against the US Dollar finding a bottom at 1.4970 overnight after core inflation was revealed to be softer at 2.9% than the expected 3.0%. Softer inflation figures confirm the BOE's stance that inflationary pressure is likely to recede in the future. Investor confidence returned as the US reported better than expected housing figures, a sign US recovery may be taking root. Today the Cable opens cautiously at 1.5047 ahead of today's UK annual budget release.

- We expect a range today in the GBP/AUD rate of 1.6320 to 1.6420

:: New Zealand Dollar: The Kiwi bounced around between 0.7035 and 0.7075 for the majority of the offshore session testing both sides of the range on several occasions. With global investors weighing up the risks of an unresolved European sovereign debt crisis and the recovery in global economic growth the NZD/USD lacked true direction and opens this morning at the top end of the band at 0.7070. Today sees the release of the fourth quarter New Zealand Current Account with the deficit expected to have widened from 1.4 billion NZD.

- We expect a range today in the NZD/USD rate of 0.7050 to 0.7100

:: Majors: With little in the way of economic data coming out of Europe these past few days investor focus has been entirely on Greece. The Euro once again tested the 1.3500 barrier overnight as German Chancellor Merkel stating 'aid is not on the agenda on Thursday' and 'not to cause turbulence on the markets by raising the wrong expectations at the summit'. It seems Germany's refusal to deal aid has rubbed off after an official said France finally agreed the IMF will have to get involved, dampening investor appetite for the Euro. The Market digested comments by the Presidents of the Chicago and San Francisco Fed regarding the state of the US economy positively returning the Euro briefly above 1.3550. The euro opens today tentatively at 1.3500 ahead of tomorrow's summit.

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