Daily Forecast - 4/3/2010

:: Australian Dollar: The Australian Dollar opens higher today at 0.9045. The unit was bolstered during yesterday's domestic session hitting an intraday high of 0.9060 after fourth-quarter national accounts revealed a 0.9 per cent increase in economic growth for an annualised pace of 2.7 per cent. The data increases pressure on the Reserve Bank to follow up Tuesday's interest rate increase with further hikes in coming months. During the offshore session the Aussie traded between a low of 0.9010 up to a high of 0.9079 on the back of a stronger Euro as Greece announced a range of new austerity measures aimed at taming the EU's largest fiscal deficit.

- We expect a range today in the AUD/USD rate of 0.9020 to 0.9100

:: Great Britain Pound: Pound Sterling (1.5080) bounced from 10-month lows overnight hitting an intraday high of 1.5130 against a weaker greenback. UK consumer confidence jumped in February to a two-year high, whilst a separate report showed that services expanded, easing some of the concerns about the parlous state of the UK economy. The gains may be short-lived however as the Bank of England is highly likely to leave interest rates on hold near record lows when it meets tonight. Meanwhile, the pound is higher against both the Australian Dollar (1.6660) and the New Zealand Dollar (2.1750).

- We expect a range today in the GBP/AUD rate of 1.6600 to 1.6750

:: New Zealand Dollar: The New Zealand Dollar opens lower today at 0.6930. In the absence of any local economic data on Wednesday, the kiwi moved marginally higher towards 0.6980 on the back of a stronger Australian Dollar as economic growth across the Tasman increased in the fourth quarter by 0.9 per cent. However, the gains were short-lived and the local unit headed into the European session around the 0.6950 area. During offshore trade the kiwi traded between a low of 0.6895 up to a high of 0.6960 as the greenback weakened across the board and commodity prices firmed. Today is another data-free day meaning the kiwi will be driven largely by offshore events.

- We expect a range today in the NZD/USD rate of 0.6900 to 0.6960

:: Majors: The Euro (1.3680) opens higher on Thursday morning as Greece announces key measures to reduce spending and increase taxes. The 16-nation currency hit a two-week high of 1.3735 as Luxembourg's Jean-Claude Juncker, who leads the region's finance ministers, welcomed Greece's EUR4.8bio plan to cut the EU's largest fiscal deficit. The greenback weakened across the board despite positive economic data. ADP employment services reported that private companies shed the fewest positions (20,000) in two years during February whilst the Institute for Supply Management's gauge of service industries showed the fastest growth in over 2 years. Meanwhile, the big dollar opens lower against the Japanese Yen at 88.30.

:: Data Releases: