Australian Dollar
It was a familiar story for the Australian dollar overnight with risk being shed across the board. Global stocks slid as did commodities with fears that Greece could leave the Euro-zone gripping markets. With attempts at forming a new government again failing in Greece, continued insecurity and volatilities across global markets have investors braced for the very real chance that proposed austerity measures may fail. After dipping briefly below the parity level against its US Counterpart during local trade, the Australian dollar failed to hold such levels dropping to an overnight low of 0.9956 against the Greenback. Opening this morning below parity for the first time this year the Reserve Bank are set to release the minutes from their most recent meeting today with any further hints at future rate cuts likely to lead to further downside movements in the Australian Dollar.

We expect a range today of 0.9900 – 1.0000

New Zealand Dollar
Risk appetite has again been sapped from markets over the past 24 hours with Greek politicians unable to break the stalemate required to form a new government. Dominating wires around the globe talks over a possible exit strategy from the Euro-zone have now become a common theme. With data releases across Europe also coming in well below expectation the New Zealand dollar has been at the mercy of global risk sentiment trading to an eventual low of 0.7765 against its US Counterpart. Opening this morning at very similar levels, the kiwi has managed to lose a full US Cent this week with the New Zealand dollar set to test the lowest levels seen this year against the Greenback

We expect a range today of 0.7710 – 0.7820

Great British Pound
Given UK stocks have managed to tumble to their lowest level this year the Great British Pound has done well to withstand the sell-off, remaining one of the best performing major currencies over the early parts of this week. With the fallout from Greece’s possible withdrawal from the Euro at the forefront of investor’s minds, fears of contagion appear well warranted in an environment dominated by political uncertainty amid voter backlash over planned austerity. Breaking briefly through the 1.61 level against it US Counterpart in overnight trade the Sterling opens around 30 basis points stronger this morning at a rate of 1.6090. Given the significant shift away from riskier backed assets the Sterling has found some fresh upside against both the Aussie (1.6156) and the Kiwi (2.0714) which open more than full cent stronger

We expect a range today of 1.6110 – 1.6220

Majors:
Whilst a hint of positive news flowed out of China yesterday when the Central Bank announced their third reduction in banks reserve requirements since November, efforts designed to eliminate the chance of a hard landing took a back seat to ongoing fears that Greece may be set to leave the Eurozone. Given Greece’s inability to form a coalition, global markets recorded heavy losses in overnight trade. Whilst industrial production figures released out of Europe also painted a bleak picture, traders are also eyeing the first meeting between new French President Francois Hollande and German Chancellor Angela Merkel on Wednesday. Given the turmoil unfolding in Greece, increasingly bond yields in Spain and Moody’s decision to downgrade the Credit Rating of 26 Italian banks it surprises few to report that the 17-Nation Euro fell overnight. After trading between a 24 hour range of (1.2820 -1.2903) against its US Counterpart we open this morning more than half a cent lower currently swapping hands at a rate of 1.2825. Given risk aversion is again likely to rear its ugly head the road ahead appears a bumpy one.

Data releases

AUD:
Monetary Policy Minutes, New motor vehicle sales m/m

NZD: No Data Today

JPY:
Household confidence

GBP: Trade Balance, CB Leading Index m/m

EUR:
French Prelim GDP q/q, German Prelim GDP q/q, French CPI q/q, Flash GDP, ZEW Economic Statement

USD:
Retail Sales m/m, CPI m/m, Empire State Manufacturing Index