Market Info

US treasury yields fall from 6 month highs - USD weakens

09/12/2010 |OzForex

:: United States Dollar: The USD is offered this morning despite US yields opening at six month highs yesterday morning. Yields steadily dropped throughout the day yesterday however which tempered demand for the currency. 10 year treasury yields fell by two basis points as markets gear up to the next US Fed meeting due on 14th December. On the agenda will be a discussion amongst officials as to whether or not to extend US government bond purchases, something that has not fully been ruled out by Fed Chairman Ben Bernanke. GBP/USD opens this morning at 1.5805, this after trading to a high of 1.5837 overnight/early this morning. Attention locally will turn to the Bank of England monetary policy decision and meeting today. No change in either base rate or QE is expected.

- We expect a range today in the GBP/USD rate of 1.5700 to 1.5840

:: Euro: EUR/USD has also recovered from yesterday morning's opening levels. It trades at 1.3290, having risen from 1.3200 over the last 24 hours. This comes as US treasury yields decline and the USD weakens across the board. There were also some supportive Euro comments made by a German official yesterday, reaffirming Germanys support for the single currency, after apparent comments by Merkel earlier in the week stating that Germany would be prepared to drop the Euro. The ECB monthly bulletin is due today and will of course be of interest to EUR/USD and cross traders keen to hear more official evaluation of current conditions within the Euro zone. GBP/EUR broke through 1.1900 yesterday and eventually traded to a high of 1.1950. It is slightly off the boil this morning and trades at 1.1890 currently.

- We expect a range today in the GBP/EUR rate of 1.1860 to 1.1960

:: Aussie and Kiwi Dollars: Both AUD/USD and NZD/USD were sold off quite heavily yesterday as local traders fretted over the possibility of a rate hike in China this weekend. The strong USD also added fuel. AUD/USD has bounced off of these lows as figures overnight showed that 54,600 jobs were created in Australia in November from the previous month, higher than the 21,300 expected. AUD/USD opens the London session at .9870. In contrast NZD/USD has struggled to recover after heavy post jobs data AUD/NZD buying and also following the RBNZ decision overnight to leave the official cash rate unchanged at 3%. This pared back expectations and saw NZD/USD sold off sharply. NZD/USD fell to .7435 and it opens this morning at .7490. GBP/NZD is higher as a result this morning and sits at 2.1070. GBP/AUD trades at 1.6000.

- We expect a range today in the GBP/AUD rate of 1.5860 to 1.6040

- We expect a range today in the GBP/NZD rate of 2.0980 to 2.1140

:: Data Releases:

  • AUD: No data due for release today
  • EUR: ECB Monthly Bulletin
  • GBP: Trade Balance, BoE Interest Rate Decision
  • NZD: Overseas Trade Index
  • USD: Unemployment Claims. Wholesale Inventories