Thursday, 2 April 2009 - Market Commentary

:: Australian Dollar: The Australian Dollar has rallied late in the New York Session and opens in Sydney at 0.6970. The Aussie moved lower throughout most of yesterday’s local session after February retail sales data revealed a drop of 2 per cent which was well below market expectations. Support for the local unit emerged around the 0.6850 area before stronger gold and equity markets helped push it to an offshore high of 0.6995. The Australian Dollar has also rallied quite sharply against the Euro (0.5270), the New Zealand Dollar (1.2275) and is steady against the Pound (0.4830).

- We expect a range today in the AUD/USD rate of 0.6880 to 0.7025

:: Great Britain Pound: Pound Sterling opens stronger against its US counterpart today at 1.4430 after a U.K manufacturing index climbed to its highest level in five months. Overnight, the pound hit a one-week high of 1.4455 as world leaders arrived in London for the Group of 20 summit, the outcomes of which are likely to overshadow tonight’s release of local PMI construction data for March. Meanwhile, despite the recent upward moves, the pound remains steady against both the Australian Dollar (2.0660) and the New Zealand Dollar (2.5420).

- We expect a range today in the GBP/AUD rate of 2.0450 to 2.0800

:: New Zealand Dollar: The New Zealand Dollar has re-captured some of yesterday’s lost ground and opens on Thursday at 0.5670 against its U.S. counterpart. The kiwi moved sharply lower yesterday down to 0.5527 after the market was spooked by comments from Reserve Bank of New Zealand Governor Mr Allan Bollard who expressed his concern at recent rises in long-term wholesale interest rates. The local unit recovered throughout offshore trade and managed to hit a high of 0.5692. The kiwi is also higher against the Euro and opens this morning at 0.4280.

- We expect a range today in the NZD/USD rate of 0.5620 to 0.5725

:: Majors: The Euro opens weaker today at 1.3220 and touched a two-week low of 1.3166 overnight as Europe’s jobless climbed in February to the highest level in almost three years. Unemployment in the Euro Zone now stands at 8.5 per cent and will add further weight to the argument that the European Central Bank is likely to cut interest rates by 50 basis points to 1 per cent at tonight’s meeting. The Japanese Yen weakened further against the greenback after a report released in the United States overnight revealed pending home sales increased in February after a significant drop the previous month. The recent Yen woes were further underlined yesterday after the release of The Bank of Japan’s survey of large manufacturers which revealed sentiment has slipped to minus 58, well below economist’s forecasts.