ClearFX Daily Commentary - 27/05/2011

Australian Dollar:

A report released by the ABS yesterday confirmed that Private Capital Expenditure expanded in the three months to March 31 by an overall figure of 3.4%. With mean forecasts originally estimated to be 2.8% the upswing in business investment lead to strong demand for the Australian Dollar, after initially opening a rate of 1.0529 against the Greenback the Aussie was snapped up by investors trading as high 1.0644. While the Australian Dollar has done well to strengthen from a six week low seen on Wednesday we see the currency open this morning at a rate of 1.0632.

We expect a range today of 1.0580 - 1.07

New Zealand Dollar:

The New Zealand Dollar opens significantly higher this morning against the Greenback at a rate of 0.8111.With top-side support above the 80 US Cents level being easily broken the kiwi gained 1.3 percent, the most seen in seven weeks. Making Headlines in the domestic session and the main driving force behind the advancement was the announcement that a major Chinese Sovereign Investor has set aside 1.5 percent of its foreign exchange reserves to directly invest in New Zealand Companies, bonds and other assets. While the kiwi advanced against all of its 16 most - traded counterparts we saw the rate hit an overnight high of 0.8123.

We expect a range today of 0.8060 -8160

Great British Pound:

The Great British Pound opens a cent higher this morning against the Greenback currently trading at a rate of 1.6402. With the US currency weaker across the board, global equities finishing higher and commodities also stronger, the Sterling advanced steadily throughout both Asian and European sessions hitting an eventual high of 1.6466. In the absence of any specific local data propping up the Pound the Sterling opens slightly lower against a stronger Aussie Dollar at a rate of 1.5412.

We expect a range today of 1.5365 – 1.5470

Majors:

Despite rising stocks and a range of corporate earnings coming in above expectation the US Dollar weakened overnight against 14 of its 16 major peers. Driving the Greenback lower was the release of US GDP which showed growth of 1.8 % for the last quarter, with initial estimates forecasting a rise of 2.2%, further data specifically a reported jump in jobless claims also did little support the US currency. Meanwhile the EURO opens slightly higher this morning at a rate of 1.4141 against its US Counterpart following on from a choppy day of trading. While initially supported by a selloff in the Greenback, news that the IMF may not release its share of Aid for Greece next month lead the EURO currency to be immediately sold down from overnight high of 1.4205.

Data releases

AUD: No Data Today

NZD: No Data Today

JPY: National Core CPI y/y, Retail Sales y/y

GBP: Nationwide HPI m/m

EUR: German Prelim CPI m/m, M3 Money Supply y/y, Private Loans y/y

USD: Revised EOM Consumer Sentiment, Revised EOM Inflation Expectations, Pending Home Sales, Personal Spending