ClearFX Daily Commentary - 31/05/2011

Australian Dollar:

After initially spiking 30 basis points upon opening yesterday the Australian Dollar was dragged lower during intraday trade bottoming out at a rate of 1.0674 against its US Counterpart. Pushing the Aussie currency lower was the release of housing data which confirmed the sale of new homes grew at the slowest pace this year for the month of April edging up just 0.2 percent against a previous figure of 4.3% seen in March this year. With a housing market showing signs of a slowdown, gross company operating profits also disappointed falling 2 percent. Meanwhile the Australian Dollar opens this morning at a rate of 1.0686 against the greenback as investors eagerly await the release of Australia's Current Account figures due for release at 11:30am

We expect a range today of 1.0630 -1.0730

New Zealand Dollar:

The New Zealand Dollar hit fresh new levels yesterday trading as a high as 82.17 against its US Counterpart. With such rates taking the kiwi to its highest level seen since it was openly floated back in 1985 the New Zealand dollar has now gained a staggering 8.8 percent since February this year. Driving the nation’s currency higher yesterday was the announcement of New Zealands Trade Surplus, figures released showed an overall trade surplus of 1.1 billion, almost twice that forecast, this being the highest monthly surplus ever recorded. With exports volumes surpassing that of imports by such a significant margin we see the New Zealand dollar open this morning at a rate 81.60.

We expect a range today of 80.90 - 0.8190

Great British Pound:

The Great British Pound opens relatively flat today, currently trading at a rate of 1.6472 against the Greenback, 20 basis points lower than the same time yesterday. In what proved to be a quiet day of trading given the Bank Holiday in the UK the currency remained relatively range-bound as US Markets also remained closed for Memorial Day. With the pound opening slightly stronger against a weaker Aussie at a rate of 1.5409 this morning, the economic calendar is set to become increasingly busy on Wednesday and Thursday in what has been slow start to the week for the Sterling.

We expect a range today of 1.5460 - 1.5550

Majors:

The US Based Currency remained relatively subdued throughout yesterday’s session given the Memorial Day public holiday, opening marginally higher this morning at a rate of 80.931 against the Yen. With Oil losing 0.2 percent and commodity prices remaining choppy it appears Greece will again be the focus in coming days as economic leaders continue to work towards ensuring the regions financial stability. While European Stocks were little changed after four straight weeks of losses for the benchmark Stoxx Europe 600 Index, the EURO also declined losing value against 13 of its 16 major peers opening this morning around 40 basis points lower at a rate of 1.4282 against the Greenback.

Data releases

AUD: Building Approvals, m/m, Current Account

NZD: NBNZ Business Confidence

JPY: Housing Starts, Manufacturing PMI, Household spending y/y, Unemployment Rate, Pre Industrial Production

GBP: Inflation Report Hearings

EUR: German Retail Sales, French Consumer Spending, German Unemployment Rate, Italian Monthly Unemployment Rate, CPI Flash Estimate y /y, Italian Prelim CPI m/m, EURO Unemployment Rate

USD: Chicago PMI, USD Consumer Confidence