Daily Forex Forecast 6/7/2010

:: Australian Dollar: The Australian Dollar opens lower on Tuesday at 0.8390 ahead of today's monthly board meeting of the Reserve Bank of Australia (RBA). The Aussie received a boost during yesterday's local session after the TD-Securities/Melbourne Institute inflation gauge rose 0.3 per cent in June for an annual reading of 3.6 per cent. Whilst official consumer price data is not scheduled for release until later this month, today's reading suggested to the market that the RBA may raise rates in the future to restrain price growth. Most economists however, expect the RBA to sit tight on rates today. In subdued overnight trade owing to a U.S. public holiday, the Aussie drifted to a 24-hour low of 0.8370.

- We expect a range today in the AUD/USD rate of 0.8340 to 0.8440

:: Great Britain Pound: For the first time in three sessions, the pound opens lower against the greenback at 1.5125. Investors sold the currency down from recent two-month highs on speculation that government plans to cut spending is likely to contain economic growth. In overnight trade, the pound moved in a tight range between 1.2508 and a high of 1.2563. In local economic data, a gauge of service companies fell to 54.4 in June from 55.4 in May. Meanwhile, the pound opens marginally lower against both the Australian Dollar (1.8022) and the New Zealand Dollar (2.1978).

- We expect a range today in the GBP/AUD rate of 1.7980 to 1.8080

:: New Zealand Dollar: The New Zealand Dollar opens lower today against the greenback at 0.6885. In the absence of any local economic data on Tuesday, the kiwi drifted in line with the Australian Dollar between 0.6850 and 0.6900 throughout most of the domestic session. U.S. Markets were closed overnight for Independence Day celebrations restricting ranges compared to recent standards with the kiwi trading between a high of 0.6939 down to the afore-mentioned 0.6850 during the offshore session. On the cross rates, the kiwi opens marginally higher against the Australian Dollar at 0.8190.

- We expect a range today in the NZD/USD rate of 0.6850 to 0.6935

:: Majors: The Euro has retreated from the recent six-week highs above 1.2600 to open on Tuesday at 1.2530. Investors sold the 16-nation currency on speculation the European Central Bank will keep interest rates on hold at 1 per cent when policy-makers meet this Thursday. Softer-than-expected Euro Zone economic data also kept a lid on the currency with the purchasing managers index for services & manufacturing slumping to 56 in May. European retail sales rose just 0.2 per cent in May. Meanwhile, in quiet trade owing to a public holiday in the United States, the greenback opens steady against the Japanese Yen at 87.77.

:: Data Releases: