Daily Forecast 8/12/2009

:: Australian Dollar: The Australian Dollar opens higher against the greenback today at 0.9135. During the local session on Monday, the unit moved down towards US91 cents before an intraday rally up to 0.9162 after the ANZ Bank reported that job advertisements rose 5.2 per cent in its monthly survey for October. It was the biggest rise in advertised positions in more than 2 years. Official labour force figures are due out this Thursday. During overnight trade, the Aussie dipped towards 0.9080 in the European session before a late rally after comments from U.S. Federal Reserve Chairman Ben Bernanke that the U.S. economy still faces formidable headwinds.

- We expect a range today in the AUD/USD rate of 0.9080 to 0.9180

:: Great Britain Pound: Pound Sterling opens lower today against the greenback at 1.6440 as the market gets nervous ahead of tomorrow's central bank meeting. In overnight activity the pound traded between a high of 1.6510 down to a low of 1.6312. The Bank of England's nine-member Monetary Policy Committee begin a two-day meeting tomorrow and are likely to leave rates on hold at 0.5 per cent. Meanwhile, the pound is marginally higher against both the Australian Dollar (1.7990) and the New Zealand Dollar (2.3020).

- We expect a range today in the GBP/AUD rate of 1.7900 to 1.8090

:: New Zealand Dollar: The New Zealand Dollar opens at 0.7130 and is still reeling from last Friday's unexpected fall in the U.S. unemployment rate which saw the high-yielders tumble on the prospect of Federal Reserve rate hike. During local trade on Monday, the kiwi tracked a firmer Australian Dollar higher to reach an intraday high of 0.7188. Looming large for the unit however is this Thursday's Reserve Bank of New Zealand monetary policy statement where Governor Alan Bollard is expected to keep rates on hold at 2.5 per cent. The kiwi is likely to remain capped at US72.50 cents near-term.

- We expect a range today in the NZD/USD rate of 0.7110 to 0.7230

:: Majors: The Euro opens higher today at 1.4830 as the greenback gave back some of the gains made in the previous session. Speculation the U.S. Federal Reserve will not raise rates anytime soon emerged after comments by Chairman Ben Bernanke who said the U.S. economy faces formidable headwinds which is likely to keep the pace of expansion moderate. In overnight trade the Euro moved as high as 1.4903. Meanwhile, the Japanese Yen (89.44) moved higher for the first time in five days as exporters came out of the woodwork and took advantage of the biggest weekly drop in more than a decade.

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