ClearFX Daily Commentary - 10/06/2011

Australian Dollar:

The Australian Dollar lost almost a cent yesterday as a shock reading in the unemployment data saw the AUD sold heavily during the local session. The part time employment figure beat forecasts coming in plus 2,900 but it was the permanent jobs lost that stunned the market, with the figure coming in negative 22,000. Overall the unemployment rate steady at 4.9%. The Aussie fell from a high of 1.0660 to an intraday low of 1.0572 on the back of the release indicating that the Australian labour market is losing a bit of momentum. Another tranche of weak local data potentially casts doubts on when the RBA will look to increase the official cash rates with bets being pushed back to August or September 2011. Overnight the local unit remained in 1 cent range as a mixed bag of US economic data (Trade Balance; Unemployment claims) limited trader’s appetite for risk.

We expect a range today of 1.0580 – 1.0680

New Zealand Dollar:

The New Zealand Dollar opens noticeably higher this morning currently trading hands at a rate of 0.8254 against its US Counterpart, a full cent higher than the same time yesterday. In what proved to be a positive domestic session for the Kiwi, as expected the New Zealand Central Bank left the official cash rate unchanged yesterday at a rate of 2.5 percent. While such results came as no surprise to investors the accompanying hawkish tone of Governor Allan Bollard spurred interest in the kiwi driving it higher as it touched very briefly the 0.8300 level. With renewed confidence surrounding the Growth prospects of the New Zealand economy the currency appears well supported in the short-term above the 0.8150 US cents Mark

We expect a range today of 0.8190 – 0.8290

Great British Pound:

The Great British Pound opens this morning at a rate of 1.6368 against the Greenback as the Bank of England met yesterday, expectedly keeping the official cash rate unchanged at a record low of 0.5 percent. While the pound remained within a tight trading ranch during the Asian session and was further supported trading as high 1.6465, the sterling was sold throughout European trade, following the announcement reaching an eventual low of 1.6357, close to this morning’s open. With many investors now scaling back their timeframe for any future rate rises the pound also opens lower against the Australian Dollar at a rate of 1.5395.

We expect a range today of 1.5370-1.5470

Majors:

As expected the ECB (European Central Bank) left interest rates on hold at 1.25% when it met last night in Frankfurt with Jean-Claude Trichet concluding at the scheduled press conference that inflation will remain high in the short term and that rates could potentially rise as early as July. After the announcement EURUSD fell almost a cent, moving between 1.4470 and 1.4630, as policy makers talked down inflation expectations for 2012 and that the bank was not in favour of restructuring or losses with regard to Greek bondholders and wants to avoid any credit event or default. Adding to Greenback strength overnight was a 6.7% contraction in the US Trade Balance with the figure coming in at US43.7 billion, its lowest reading since December, compared with a forecast of US48.8 billion. Other US news included a stronger in consumer confidence and a minor increase in unemployment claims. The USD is up against the Japanese Yen (80.38) and British Pound (1.6364)

Data releases

AUD: No Data

NZD: RBNZ Gov Bollard Speaks

JPY: Tertiary Industry Activity m/m

GBP: Manufacturing Production m/m, PPI Input m/m, PPI Out m/m, Industrial Production, Consumer Inflation Expectation

EUR: German Final CPI, German WPI m/m, French Industrial Production m/m, ECB President Trichet Speaks

USD: Imports Prices m/m, FOMC Member Dudley Speaks