:: Australian Dollar: Despite the release of stronger than expected Australian economic data yesterday the Aussie dollar hovered around the 91 cent handle in Asia before resuming its recent downward trend in offshore trade overnight. With strong U.S economic data and general risk aversion investors flocked to the safety of the Greenback taking AUD/USD to a low near 0.9020 before bouncing back slightly to open this morning at 0.9050. With investors now focused on the psychological 90 cent level today sees the release of the closely watched Australian Retail Sales report along with the countries Trade Balance which have the potential of adding some support to the currency should they surprise to the upside. Technical resistance ahead of 0.9120 is likely to limit the possibility of any further gains against the Greenback in Asia today.

- We expect a range today in the AUD/USD rate of 0.9000 to 0.9100

:: Great Britain Pound: The Pound Sterling gained some support in early offshore trade pressing against 1.5175 following a stronger than forecast report on the U.K construction sector's purchasing managers index. The move was relatively short lived however as investors continued to dump the Euro and Pound in favour of U.S dollars with the move exacerbated by a strong North American employment report. After reaching an eventual bottom of 1.5070 the GBP opens this morning at 1.5100 USD whilst the GBP/AUD cross rate is relatively unchanged at 1.6670 with the U.K election kicking off today sure to see an increase in the volatility.

- We expect a range today in the GBP/AUD rate of 1.6600 to 1.6725

:: New Zealand Dollar: After trading in a relatively narrow band between 0.7185 and 0.7215 for the majority of the Asian day yesterday the Kiwi traded lower overnight, at one stage exchanging as low as 0.7140 before bouncing to 0.7180 against the Greenback. Direction came from another round of selling in EUR/USD and a general increase in the appeal of the U.S dollar which threatens to continue for the remainder of this week at least. Locally the market will be keenly anticipating a speech by the RBNZ Governor and the N.Z employment report with forecasts of a rise of around 0.3% for Q1 2010.

- We expect a range today in the NZD/USD rate of 0.7120 to 0.7220

:: Majors: Better than expected Euro-zone economic data in the form of PMI and Retail Sales and upward revisions in economic growth forecasts by the EU commission were not enough to stem the flow of funds out of the Euro overnight. The EUR/USD demise persisted to push below 1.2800 in late offshore trade as debt issues and strong U.S economic data continue to drive momentum. As a prelude to Friday's much anticipated U.S non-farm payroll data the ADP employment report indicated an increase of 32k jobs during April triggering more demand for the Greenback. Risk aversion triggered some strong selling on the EUR/JPY cross rate which also dragged USD/JPY back below the 94 handle to open this morning around 93.85.

:: Data Releases:

  • AUD: Mar Trade Balance & Mar Retail Sales
  • NZD: Q1 Employment Report
  • USD: Q1 Unit Labour Costs, Q1 Non-Farm Productivity & Fedspeak
  • GBP: Apr Services PMI
  • EUR: ECB Rate Decision
  • JPY: Apr Vehicle Sales
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