NZD/USD, March 08, 2010

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 Australia's official cash rate of 4.00 per cent.

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

GBP/AUD, March 03, 2010

Great Britain Pound: The Pound Sterling found some respite overnight with a weaker Greenback helping arrest the recent slide in the Cable. Investors shrugged off a mildly disappointing purchasing manager’s report for the U.K construction industry, instead pinning their hopes on an impending announcement of a new deficit reduction package out of Greece in the next 24 hours. Support at 1.4850 held in early London exchange with the subsequent bounce taking GBP/USD back towards 1.5 as it opens this morning at 1.4965 whilst the GBP/AUD cross rate continues to struggle exchanging around 1.6550 in early Asia.

- I expect a range today in the GBP/AUD rate of 1.6475 to 1.6625

Majors, March 03, 2010

Majors: The Euro made a new low overnight exchange at 1.3435 against the Greenback with inflation in the Euro-zone dropping from an annual rate of 1% in January to 0.9% in February. Support held however better than expected producer prices gave the Euro a boost along with the likelihood of the announcement of further budget cuts by Greece possible as early as tomorrow. The big dollar weakened across the board following the return to risk with EUR/USD finishing at 1.3600 and USD/JPY at 88.65 with the latter trading at its lowest level in 2010. With no meaningful U.S economic data released overnight it was a relatively subdued North American session as investors eye Friday’s employment report for an update on the state of the economy.

AUD/USD, March 03, 2010

Australian Dollar: The strength of the Australian economy was evident once again yesterday following the release of a much stronger than forecast 1.2% rise in Retail Sales during January adding some support to the AUD/USD in early Asian trade. The news was tempered somewhat however with an unexpected 7% decline in Building Approvals for the same month keeping the Aussie dollar capped around the 90 cent mark heading into the RBA rate announcement. Australia’s central bank raised the official cash rate by 0.25% to 4% after keeping rates on hold the previous month sparking an immediate spike above 90. The move proved short lived however as the news was factored in by many traders with long positions being squared after the release. Offshore markets resumed the rally taking the AUD/USD back up to 0.9050 as the U.S dollar lost ground across the board with confidence returning amidst the expectation of new deficit reduction measures from Greece. Today sees the release of Q4 GDP data out of Australia with economic growth expected to have increased from 0.2% to around 0.7%.

- I expect a range today in the AUD/USD rate of 0.8985 to 0.9085

GBP/NZD, March 03, 2010

Great Britain Pound: The Pound Sterling found some respite overnight with a weaker Greenback helping arrest the recent slide in the Cable. Investors shrugged off a mildly disappointing purchasing manager’s report for the U.K construction industry, instead pinning their hopes on an impending announcement of a new deficit reduction package out of Greece in the next 24 hours. Support at 1.4850 held in early London exchange with the subsequent bounce taking GBP/USD back towards 1.5 as it opens this morning at 1.4965 whilst the GBP/NZD cross rate opens relatively unchanged at 2.1485.

- I expect a range today in the GBP/NZD rate of 2.1380 to 2.1550

NZD/USD, March 03, 2010

New Zealand Dollar: The announcement of an interest rate rise in Australia added some initial support to the Kiwi around 0.6980 U.S dollars however buying interest waned during late Asian afternoon exchange and the NZD/USD entered offshore at 0.6960. After dipping to a low of 0.6925 in Europe the Kiwi staged a rally back to 0.6980 following a return to risk and gains in EUR/USD. The AUD/NZD cross rate continues to garner plenty of interest trading within a whisker of 1.3 to open this morning near the highs at 1.2975 as the AUD/USD continues to edge higher whilst the NZD/USD remains relatively range bound around 70 cents.

- I expect a range today in the NZD/USD rate of 0.6925 to 0.7000

Great Britain Pound, Australian Dollar and Kiwi, March 03, 2010

Aussie and Kiwi Dollars: The RBA raised rates overnight to 4% in an attempt to cool inflation. Australia’s largest banks passed on the rate rise immediately, lifting the rate at which consumers deposit and borrow. Immediately after the news AUD/USD traded up to levels above 0.9030 before calming and trading around the all important 0.9000 level. The rate rise highlights the growing disparity between Australia and most other major economies in the world, which are at present, still stuck in a world of debt and stimulus packages. Nowhere is this clearer than in the GBP/AUD rate, which yesterday fell to 1.6545 from an open at levels above 1.6900. Despite this rate rise the New Zealand dollar sold off slightly overnight, possibly on local investors switching funds to Australian assets. In the medium to long term, the news in Australia is likely to provide support to the Kiwi as demand for high yielding currencies increases.

- I expect a range today in the GBP/AUD rate of 1.6450 to 1.6700

- I expect a range today in the GBP/NZD rate of 2.1300 to 2.1500