Daily Forecast -8/3/2010

:: Australian Dollar: The Australian Dollar has managed to hang onto its recent gains and opens the new week at 0.9060. During Friday's local session, the unit consolidated around the US90 cent mark and traded in a narrow band ahead of U.S. employment data. The eagerly-awaited jobs report came in better than expected with the unemployment rate holding at 9.7 per cent as payrolls dropped by 36,000. The data prompted a spike in the Aussie to a session-high 0.9090 on optimism the global economic recovery may be gathering pace. Meanwhile, the Aussie is sharply higher against the Japanese Yen and opens at 82.00 compared to Friday's opening level of 80.24.

- We expect a range today in the AUD/USD rate of 0.9040 to 0.9100

:: Great Britain Pound: Pound Sterling (1.5125) opens higher on Monday after a report in the US on Friday night showed fewer jobs were lost than expected spurring demand for riskier assets and higher-yielding currencies. The pound was little-changed during the local session after UK producer prices rose in February as higher commodity prices sustained inflation, which is currently running above the governments 3 per cent ceiling. The pound has slumped this year on budget deficit concerns. Meanwhile, the pound opens lower against both the Australian Dollar (1.6660) and the New Zealand Dollar (2.1690).

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

:: New Zealand Dollar: The New Zealand Dollar opens higher on Monday at 0.6945 after a report in the US on Friday night showed fewer jobs were lost than expected spurring demand for riskier assets and higher-yielding currencies. The U.S. unemployment rate remained unchanged at 9.7 per cent, softening the greenback and pushing the kiwi to an overnight high of 0.6971. Meanwhile, the kiwi remains near nine-and-a-half year lows against the Australian Dollar at 0.7650 as the Reserve Bank of New Zealand is expected to leave interest rates on hold this week at 2.5 per cent compared to Australias official cash rate of 4.00 per cent.

- We expect a range today in the NZD/USD rate of 0.6920 to 0.6980

:: Majors: The greenback and Japanese Yen were both weaker across the board after the US non-farm payrolls report was released on Friday night. The dollar hit a 10-day high against the Yen at 90.20 soon after the data which revealed a loss of 36,000 positions in February after a revised 26,000 decrease in January. The report was better than expected, leaving the jobless rate at 9.7 per cent, spurring demand for riskier assets and higher-yielding currencies. Meanwhile, the Euro (1.3625) firmed as EU member nations continue working on a contingency rescue plan for Greece. In overnight trade, the Euro moved from a low of 1.3529 to close near its session highs around 1.3623.

:: Data Releases: