Aussie and Kiwi Dollars / British Pound, March 08

Aussie and Kiwi Dollars: The Aussie benefitted from stronger than expected jobs figures from the US on Friday. Unemployment and Payroll data improved, causing investors to shift into riskier assets, in this case, the Aussie and the Kiwi. AUD/USD opens up at 0.9120 this morning, after reaching a high of levels above 0.9130. Economists are already talking of a possible short term correction, as investors take profit on long positions and sell the Australian dollar. GBP/AUD opens slightly lower at 1.6630, but given the growing divergence in interest rates we could easily test last week’s lows of below 1.6500. In New Zealand better than expected manufacturing and home build figures pushed the Kiwi above 0.7000 against the dollar and below 2.1700 against the pound. Seasonally adjusted residential building rose 7.4% in the December quarter, and manufacturing sales rose 3.1% in the same period. Although recent economic data has been better than many expected, it is unlikely that the RBNZ will raise rates at its Wednesday policy meeting. Rates are likely to remain at 2.5%.

- I expect a range today in the GBP/AUD rate of 1.6500 to 1.6700

- I expect a range today in the GBP/NZD rate of 2.1500 to 2.1700