Daily Forecast - 29/12/2009

:: Australian Dollar: The Australian Dollar opens above 88 cents this morning as a continued lack of liquidity during the holiday period continues to keep the market subdued. A lack of meaningful data and the fact that the majority of FX participants where already on their festive breaks meant that the little battler was again subjected to a 1 cent trading range for the majority of the offshore session. Despite a better release in the of US Durable Goods Orders for November, the Aussie managed to break through the 88 cents mark during US trade Thursday to eventually post an intraday high of 0.8844. With no local data slated for release this week, the Australian Dollar will be at the mercy of offshore events and happenings. At time of writing the Australian Dollar is changing hands at 0.8860.

- We expect a range today in the AUD/USD rate of 0.8800 to 0.8900

:: Great Britain Pound: With no significant data out of the UK last Thursday the Pound still remained on the back foot against its Trans Atlantic rival with Cable trading between 1.5924 and 1.6019. News out of the US that the F.O.M.C. (Federal Open Market Committee) would continue with some of its stimulus measures saw a brief rally on the Pound to just above 1.60 before some strong US data lead a late fight back in Christmas Eve trading. Data releases are on the light side this week in the UK and with the majority of the market on an extended break from trade one suspects GBPUSD to remain within a fairly narrow range. Meanwhile, the pound opens largely unchanged against both the Australian Dollar (1.8025) and the New Zealand Dollar (2.2575).

- We expect a range today in the GBP/AUD rate of 1.7950 to 1.8100

:: New Zealand Dollar: The New Zealand Dollar has mirrored the Australian Dollars movement against the Greenback over the last several days with the Kiwi moving in a one cent trading range. The Kiwi hit a low of 0.6980 Thursday before moving up and hitting a high of 0.7080 on the back of US stimulus hearsay. This morning to NZ dollar is relatively unchanged from Thursday''s close and is currently exchanging at at 0.7084 With no significant data due out of New Zealand until the New Year, direction will to the lead from foreign data releases and events.

- We expect a range today in the NZD/USD rate of 0.7000 to 0.7100

:: Majors: The Greenback fell against a basket of currencies Friday giving back almost 3 weeks of solid gains as rumours swept through the markets that the Federal Reserve will continue with stimulus measures to support the US economic recovery in spite of some recent rhetoric indicating the opposite. Despite a positive reading in the Durable Goods Orders for November and a slide in Initial Jobless Claims (actual 452k; forecast 470k) the big dollar hit a fortnightly low of 1.4436 against the EURO and 91.77 against the Yen. With China and Japan being the only markets open Friday 25th December, FX volumes traded were thin and currency movements across the broad restricted to a minimal. On the data front and of high importance this week will be today's release of Euro Zone and German CPI, along with US Consumer Confidence for December. These releases are all expected to come in well above expectations and should make for an interesting week on the currency front.

:: Data Releases: