Australian Dollar Thursday 8 March 2012

by admin on March 7, 2012

Thursday, 8 March 2012 – Market Commentary by OzForex
By Michael Judge
Australian Dollar:The Australian Dollar fell against its US Counterpart during intraday trade yesterday after figures released showed Australia’s economy expanded at half the pace forecasted by economists. With Gross Domestic Product advancing 0.4 percent for the final quarter of 2012 from the 3 previous months the Australian Dollar immediately lot ground falling to a midsession of low 1.0508 against its US Counterpart. Despite the early sell-off, the Australian dollar rebounded strongly as it entered the offshore, supported well by renewed optimism that Greece is moving closer to an agreement with private investors which would essentially see the highly indebted nation reduce the amount of privately owned debt by 53.5 percent. Opening this morning around 20 basis points stronger than the same time yesterday at a rate of 1.0573, the busy week for the Aussie is set to continue today with the release of local unemployment figures due for release at 11:30 this morning

We expect a range today of 1.0510 – 1.0630

New Zealand Dollar:

The New Zealand Dollar has managed to find some buyers over the course of the last 24 hours, following a week in which commodity currencies have been hammered by poor global sentiment. After starting the day at a rate of 0.8121 against its US Counterpart the Kiwi traded as high as 0.8201 in overnight trade with commodity prices and global equities all finishing in positive territory. In a statement released this morning the Reserve Bank of New Zealand, in line with expectation kept the official benchmark cash-rate on hold at a rate of 2.5 percent. The Central Bank Governor Alan Bollard said in his accompanying statement that weak economic growth and concerns over Europe’s debt crisis could potentially spill over into weaker global demand for New Zealand’s exports. Falling around 40 basis points following the announcement the New Zealand Dollar opens this morning buying 81.61 US Cents.

We expect a range today of 0.8100 – 0.8210

Great British Pound

UK Stocks gained for the first time in four days yesterday, with markets overall rebounding well from the biggest drop off this year. With US ADP Employment figures beating expectation overnight, speculation has already kicked off ahead of the headline unemployment rate which is expected out of the US on Friday. After trading to an earlier low 1.5696 against its US Counterpart the Great British Pound was able to find some upside opening this morning stronger at a rate of 1.5735. Looking today the Bank of England are due meet this evening with any hint of further monetary easing likely to have a weakening impact on the Sterling. Meanwhile this morning the Sterling opens weaker against both the Aussie (1.4876) and the Kiwi (1.9275)

We expect a range today of 1.4820 – 1.4930

Majors:

European Stocks rebounded overnight following the biggest drop since November as positive sentiment returned to markets. Helping turn the risk button back on overnight, optimism mounted that Greece will be successfully able to negotiate the biggest ever sovereign debt restructure as they moved closer to the necessary participation rate of 75 percent required to ensure that the heavily indebted nations private debt holdings drop by the required 53.5 percent. Whilst on European happenings despite German Factory Orders which unexpectedly declined for the month of January, investors snapped up the 17-Nation Euro driving it to an overnight high of 1.3163 against its US Counterpart as it opens stronger this morning at a rate of 1.3142. In addition to the positive flows out of Europe, also helping markets return to positive territory yesterday was the US ADP Non-Farm Employment Report which showed companies in the US added 216,000 workers in February beating the median forecast. Also opening noticeably stronger this morning is the Greenback which is currently trading at a rate of 81.147 against the Japanese Yen.

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Data releases

AUD: Unemployment Rate

NZD: Official Cash Rate, Manufacturing Sales q/q

JPY:  Final GDP q/q, Bank Lending y/y, Current Account, Economy Watchers Sentiment, Prelim Machine Tool Orders y/y

GBP: Official Bank Rate, Asset Purchase Facility, MPC Rate Statement

EUR: French Final Non-Farm Payrolls q/q, French Trade Balance, German Industrial Production m/m

USD: Challenge Job Cuts y/y, Unemployment Claims

This information has been written by Michael Judge 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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