Whilst Australian business investment unexpectedly declined last quarter by 1.2 percent, the Australian dollar managed to rebound from its earlier losses. Bouncing from its lowest point since October 2012, the sale of new homes provided a bright note for the higher yielding currency which appreciated as it entered afternoon trade. With the HIA new home sales report showing an increase in sales of 4.2 percent, this was enough for investors to pick up the Aussie who drove it to a 24 hour peak of 1.0263 against the Greenback. Given the expected the release of key manufacturing data from China today, should such figures disappoint it’s likely we will once again see sub 1.0200 levels tested. Meanwhile the Aussie opens marginally lower at 1.0223 this morning with recent ranges remaining firm overnight.
Despite a handful of key releases throughout the US and Europe the New Zealand dollar has remained relatively unaffected over the past 24 hours. Trading between a range of (0.8252 – 0.8323) when valued against the Greenback, the Kiwi has once again struggled with a level in excess of 83 US Cents. Whilst overnight figures showed US GDP grew at 0.1 percent annual rate, up from a previously estimated 0.1 percent drop, continued signs of political instability have plagued the New Zealand dollar whose value is so greatly influenced by global risk flows. Opening this morning unchanged at a rate of 0.8272 a positive Manufacturing PMI reading from China today will be required for those wanting to see the growth linked currency move higher in the short-term.
Following a week in which ECB President Mario Draghi and US Fed Chairman Ben Bernanke both signalled continued support for their respective economies the Great British Pound has failed to ride the wave of global optimism over the last couple of days. Despite a string of positive data releases throughout the US the only good news for the Sterling is that it hasn’t fallen further. Running in to some solid support around the 1.51 mark when compared against the Greenback the Sterling opens only marginally stronger than yesterday at a rate of 1.5173. Meanwhile on the cross rates the Great British Pound opens 0.3 percent stronger against both the Aussie (1.4839) and the Kiwi (1.8340).
Markets have generally moved higher overnight after revised figures showed the world’s largest economy grew at an annual rate of 0.1 percent in 2012 up from the previous figures which estimated a contraction of 0.1 percent. Adding to the positive tone across markets US weekly unemployment claims also recorded a notable drop shrinking to 344 000. Whilst the Chicago PMI reading also came in above forecast the longer-term effects of the US$85 billion in government spending cuts which are set to begin tomorrow have already started to send waves of concern through markets given the perception they could further hurt a recession hit Europe. Keeping in mind we have seen a generally stronger Greenback for much of this week the same cannot be said for the Euro which remains volatile in comparison. Shedding around half a cent the Euro weakened overnight to a low of 1.3056, the move made even more alarmingly given German unemployment unexpectedly fell as did inflation. Highlighting the toll of political instabilities in Italy the shared unit is weaker this morning at 1.3065. Meanwhile the USD/JPY opens stronger at it currently swaps hands at a rate of 96.69.
Source http://www.fxstreet.com/fundamental/market-view/daily-forex-analysis/2013-02-28.html
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