Daily Forex Commentary 3/8/2010

:: Australian Dollar: The Australian Dollar continues to benefit from a weaker greenback and opens this morning buying 0.9136. Hitting a 3 month high overnight, the Aussie rallied to 0.9145 against the Greenback as investors shrugged off weaker Chinese PMI data. Investors remained bullish following better than expected manufacturing figures in the Euro zone overnight. Although it was revealed yesterday that Australian PMI expanded to 54.4 in July from 52.9, new home sales were reported to be in the red falling -5.1%. The RBA is expected to keep interest rates steady at 4.25% in today's meeting.

- We expect a range today in the AUD/USD rate of 0.9100 to 0.9175

:: Great Britain Pound: The Pound reached a 6 month high overnight against the US Dollar breaking above 1.5900 following signs the UK economy is recovering. British PMI expanded for the 10th month in a row printing above expectations of 57.1 coming in at 57.3 for July. Consistent upside surprises and rising UK equities led by gains in BHP Billiton and strong earnings from HSBC fuelled the aggressive rally as risk appetite improved throughout the evening. This morning the Sterling opens at 1.5890 US while buying 1.7400 Aussie and 2.1700 Kiwi.

- We expect a range today in the GBP/AUD rate of 1.7390 to 1.7440

:: New Zealand Dollar: The New Zealand Dollar benefitted from yesterday's potent rally in risk making several attempts to break 0.7340. Appetite for the NZ dollar continued throughout the evening as relatively positive economic data from the US and the UK, and better than expected earnings announcements, lifted market sentiment. According to a Treasury report, exports to China and Australia and commodity prices are off-setting the nation's weak consumer spending and housing demand keeping the Kiwi afloat. This morning the Kiwi opens buying 0.7320 US Dollars. Meanwhile, the Kiwi is steady against the Australian Dollar at 0.8015.

- We expect a range today in the NZD/USD rate of 0.7290 to 0.7345

:: Majors: Offshore, European manufacturing PMI improved 0.2 index points from a previous reading of 55.6 to the current 56.7, leaping over market expectations at 56.5. The news ignited a risk rally which sent the Euro to a 3 month high, barely missing the 1.32 US mark, as more positive news flowed from the US. Better than expected corporate earnings and manufacturing figures from the US drew less pessimistic comments from Fed Chairman Bernanke dampening demand for haven currencies. The Euro opened this morning steady at 1.3172 against the US Dollar. Meanwhile, the big dollar has moved away from recent 8-month lows and opens in Sydney at 86.40.

:: Data Releases: