|Wednesday, 7 March 2012 - Market Commentary by OzForex|
|By Michael Judge|
|Australian Dollar:Australia’s Central Bank as expected maintained the official benchmark cash rate at 4.25 percent in a statement released yesterday. Reiterating his recent stance the RBA’s Governor Glenn Stevens employed the same stance as last month by labelling the current Policy as “appropriate for the moment”. In what was a slightly more dovish statement than anticipated the Australian Dollar lost immediate ground following the announcement and despite positive current account figures propelling the local unit to an earlier high of 1.0690 against its US Counterpart the Australian Dollar got hammered in the 12 hours of trade which followed opening this morning significantly lower at a rate of 1.0529, losing a full one and half US Cents. Markets are set to remain volatile today as investors look towards domestic GDP figures which are due to be released at 11:30am this morning with any reading below the forecasted result of 0.7 for the December quarter likely to leave the Australian dollar on a slippery slope
We expect a range today of 1.0460 – 1.0600
New Zealand Dollar:
The New Zealand Dollar weakened across the board yesterday as investors flocked away from assets deemed riskier in nature. With global equities recording large losses and commodities falling we have seen a large retreat back in to the safe-haven units over the past 24 hours, driven mainly by concerns that global growth is stalling. Following the announcement out of the 17-Nation Euro Zone that Economic growth for the final quarter of 2011 shrunk by 0.3 percent the Kiwi was subsequently sold to reach an eventual low of 0.8099 against is US Counterpart, the lowest level seen in close to six weeks. Opening this morning a full cent weaker currently buying 81.07 US Cents, the New Zealand Dollar appears to again be at the mercy of global risk flows over the next 24 hours as investors look towards New Zealand’s Interest Rate decision tomorrow
We expect a range today of 0.8050 – 0.8160
Great British Pound
Investor’s hands were well and truly on the sell button for the Sterling overnight with fresh concerns surfacing that private-sector support for Greece’s debt restructuring has started to diminish. The FTSE 100 Index lost 1.9 percent yesterday as Euro-Zone growth figures also disappointed markets. After starting the day at a rate of 1.5860 against its US Counterpart the Great British Pound has managed to shed a staggering one and a half cents over the past 24 hours currently trading at a rate of 1.5706. In what was a dreadful day for global markets the play of the day was to buy anything with a safe haven status. Despite the significant drop against the Greenback the Sterling has managed to find some minor upside against a weaker Australian Dollar (1.4921) and New Zealand Dollar (1.9372). In the absence of any local data over the coming 24 hours, the Sterling is likely to take leads from any developments out of Greece in the short-term.
We expect a range today of 1.4870 -1.4980
The EURO declined to a two-week low versus the Dollar overnight after a report showed that growth in the 17-Nation Euro-Zone contracted by 0.3 percent. In a week which has been dominated by downward revisions in global growth forecasts, last night’s reading has only added to concerns that the current market environment is offering investors more questions than answers. After reaching an earlier high of 1.3241 against the Greenback the EURO has been well sold in overnight trade opening this morning noticeably weaker at a rate of 1.3104. In a classic move of risk-aversion this week investors have all but shunned European-denominated assets helping explain the sharp appreciation in both the Greenback and Japanese Yen, which are renowned for their strength during times of uncertainty. Looking ahead this week the ECB is due to meet on Thursday to discuss their current Policy stance with concerns also being highlighted overnight that the Central Banks Balance Sheet has in fact accelerated too quickly, surging to a record of 3.02 trillion Euro’s last week, 31 percent bigger than the German Economy.
Visit www.OzForex.com.au for more information
AUD: GDP q/q
NZD: No Data Today
JPY: Leading Indicators
GBP: No Data Today
EUR: German Factory Orders m/m,
USD: ADP Non-Farm Employment Change, Revised Non-Farm Productivity q/q, Revist Unit Labor Costs q/q
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.