ClearFX Daily Commentary - 23/06/2011

Australian Dollar:

The Australian Dollar held its ground yesterday as news filtered through that the Greek Prime Minister George Papandreou had won a confidence vote in parliament. While the currency remained within a tight 40 basis point trading range during the Asian Session hitting a 24 hour low of 1.0564 and high of 1.0649 against its US Counterpart, the market is most likely to remain sentiment bound in the near-term as investors continue to remain sensitive to any further developments in Greece. In the absence of any local data expected today we see the Australian Dollar open this morning currently trading at a rate of 1.0555 following a statement by the US Federal Reserve stating that US Interest Rates will remain at record lows as the pace of economic recovery remains frustratingly slow.

We expect a range today of 1.0520 - 1.0620

New Zealand Dollar:

In what proved a busy day of economic releases in New Zealand yesterday, the market sees the currency open higher this morning currently buying 81.42 US Cents. With Credit Card Spending gaining 0.6 percent in May and Current Account Figures exceeding expectations the kiwi was bought to reach an eventual high of 0.8193 against its US Counterpart. In overnight trade a statement released out of the US Federal Reserve provided no nasty surprises as the Kiwi remains reluctant to move out of its current short-term trading ranges with Sovereign Debt Concerns out of Europe still very much in the forefront of investor’s minds.

We expect a range today of 0.8095 – 0.8190

Great British Pound:

The Pound (1.6057) lost more than a cent in value against the Greenback overnight as the minutes from the Bank of England’s June meeting showed that 7 out of the 9 members voted to keep interest rates on hold whilst 2 voted for an increase. In the accompanying statement the minutes indicated that some of the board members thought additional bond purchases (currently at GBP200 Billion) may be required as growth begins to stall in the local economy. The board also made mention of the current crisis in Greece and the fact that it may spread beyond Europe and have an adverse effect on growth and the banking system in the UK. Versus its Southern Hemisphere counterparts, Pound Sterling is currently exchanging at 1.5216 against the Aussie Dollar and 1.9723 against the Kiwi.

We expect a range today of 1.5160 – 1.5270

Majors:

The greenback opens little-changed against the Japanese Yen (80.393) after the US Federal Reserve left its benchmark interest rate unchanged between 0 – 0.25 per cent and repeated a pledge to keep it there “for an extended period”. Central Bank officials said they will maintain the record monetary stimulus measures to support a flagging economic recovery. In the accompanying statement, the Federal Open Market Committee said “the economic recovery is continuing at a moderate pace, though somewhat more slowly than the committee had expected. Meanwhile, the Euro (1.4315) opens lower on continued Greek debt concerns. Markets are awaiting the outcome of proposed austerity measures as Prime Minister George Papandreou will next week seek approval for EUR78bill package of budget cuts and asset sales that will help ensure more financial aid from the EU and IMF.

Data releases

AUD: CB Leading Index m/m

NZD: No Data Today

JPY: No Data Today

GBP: BBA Mortgage Approvals, CBI Realized Sales

EUR: French Flash Manufacturing PMI, French Flash Services PMI, German Flash Manufacturing PMI, German Flash Services PMI, Flash Manufacturing PMI, Flash Services PMI, EU Economic Summit, ECB Trichet Speaks

USD: Unemployment Claims, New Home Sales