Australian Dollar Monday 12 March 2012

by admin on March 12, 2012

Monday, 12 March 2012 – Market Commentary by OzForex
By Carly Pickering
Australian Dollar: The Australian Dollar was pushed temporarily lower throughout local hours on Friday and a surprising trade deficit for the month of January was reported by the Australian Bureau of Statistics. In contrast to the expected 1.52 billion dollar surplus between exports and imports, markets were faced with digesting a 0.67 billion dollar deficit, the first trade deficit in 11 months. Losing around 20 points and touching session lows of 1.0620, the Aussie did briefly recover losses although deteriorating risk sentiment and a rallying Greenback pushed the local unit lower offshore, to a closing value of 1.0570. Opening this morning at 1.0550, the downward trend of the Aussie has been maintained by a gain in Chinese imports, resulting in the largest trade deficit the nation has reported in 23 years.We expect a range today of 1.0510 – 1.0600 - Click here to transfer money

 

New Zealand Dollar: In a session lacking local risk events, the New Zealand Dollar was attuned to offshore developments surrounding Greece’s private sector bond swap and US fundamental releases. Supported throughout the Asian session by anticipation of the impending Greek deal, a condition for the receipt of its second bailout package, the Kiwi touched highs of 0.8270 before coming under pressure into offshore hours. Of note to the Kiwi was an impressive US unemployment report on Friday which sent the Greenback rallying, and a Chinese trade deficit of 31.5B which hit risk sentiment over the weekend. These events have combined to push the New Zealand Dollar below 82 cents this morning, opening for the week at 0.8180 against the Greenback; a worse than expected trade balance across the Tasman on Friday lifting the Kiwi’s spirits relative to the Aussie Dollar and the pair open today at 1.2895 (0.7755).

We expect a range today of 0.8130 – 0.8230 - Click here to transfer money

 

Great British Pound: Sterling closed last week lower following the better than expected US employment report released on Friday, the resultant Greenback rally capping off a week where Cable continued to slide from Feb 29 highs and Sterling struggled to move in either direction against the Euro. Earlier in the session Cable moved lower after manufacturing production in the United Kingdom fell back by 0.1% in January, an initial low of 1.5750 to be later broken by market reaction to the aforementioned US jobs report. Closing the week at 1.5670 Sterling opens relatively unchanged against the US Dollar, however a pullback in the Aussie and Kiwi this morning has moderated Sterling’s fall in the cross-rates. GBP/AUD currently trades at 1.4840 after touching lows of 1.4780 on Friday evening; GBP/NZD trades at 1.9130 up from 1.9035.

We expect a range today of 1.4760 – 1.4900 - Click here to transfer money

 

Majors: The US jobs market is looking up after Friday’s Non-Farm Payrolls report, as this vital monthly unemployment report showed another 227,000 jobs added during January. Beating expectations by 18,000, this number has not only improved sentiment surrounding unemployment, but also increased speculation of better than expected Retail Sales due out Tuesday this week. Subsequently the Greenback rallied to touch 10 month highs against the Japanese Yen, nearing 82.60 and later consolidating to close last week and open this week around 82.40. The Euro also fell against the US Dollar touching lows of 1.3100 after the release of US unemployment data culminated with downward pressure surrounding the Euro and Greece’s voluntary write-down of private sector creditors. A crucial debt swap was reached on Friday which paves the way for the indebted nation to receive its second bailout totalling 110 billion Euros. It is reported, however, to likely invoke around US$3 billion worth of credit default insurance and this will weigh heavily on the shared currency. Opening this morning the Euro sits just above lows at 1.3115.

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Data releases:

AUD: No data due for release

NZD: No data due for release

JPY: Core Machinery Orders m/m

GBP: No data due for release

EUR: German WPI m/m

USD: Federal Budget Balance

This information has been written by Carly Pickering of OzForex Pty Ltd (AFSL 226 484). This forex commentary is republished at Forex.com.au as general information only. IMPORTANT : This information has been prepared for distribution over the internet and without taking into account the investment objectives, financial situation and particular needs of any particular person. OzForex Pty Ltd makes no recommendations as to the merits of any financial product referred to in its website, emails or its related websites.

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