Australian Dollar
The Australian Dollar has gapped higher this morning as news hits the wires, Spain will be receiving a ‘line of credit’ to help its struggling banking sector weather the ongoing economic turmoil. After closing last week back just above 99 cents, immediate relief in the markets has boosted the Aussie to touch parity this morning, though some may argue a Spanish rescue is not enough to see these levels sustained. With today being a public holiday in most states of Australia, trading volumes may remain a little thin and thus we may be in for some choppy trade as markets process exactly what effect the weekend events may have. If the local unit succeeds in conquering the parity mark, it will face further resistance around 1.0050, any move lower and the Aussie will be looking for support around 0.9930.

We expect a range today of 0.9920 – 1.0020

New Zealand Dollar
After gaining 2.2% against the Greenback last week the New Zealand Dollar has been given another boost higher over the weekend with Spain’s banking troubles seemingly taken care of for the time being. With this theme weighing heavily on risk sentiment, the relief rally has seen the Kiwi gap higher this morning, from last week’s close of 0.7696 to 0.7775 this morning. With only quarterly manufacturing sales due for release locally and a public holiday across the Tasman, thin markets are likely to be witnessed today. The NZD/AUD gained some ground on Friday and opens similar to Friday’s close at 0.7780.

We expect a range today of 0.7700 – 0.7790

Great British Pound
The British Pound closed last week slightly higher than where it began, although some end of week position squaring along with disappointing PPI figures narrowed the gain on Friday. Holding above 1.5400, Cable finished up at 1.5460 before gapping higher this morning on a bailout of the Spanish banking system. Current levels trade at 1.5540 and an absence of local data will leave the Pound subject to risk appetite in the near-term. Antipodean cross rates have lost ground amidst a risk rally in the early hours of Monday, GBP/AUD opened at 1.5530 and GBP/NZD at 1.9960.

We expect a range today of 1.5500 – 1.5640

Majors
Spain has become the fourth member of the euro-zone to seek international assistance over the weekend as they confirmed their banking system would require up to 100 billion Euros to repair the ailing balance sheets of the country’s banks. Market’s needed this development in order to calm nerves ahead of Greece’s return to the polls this Sunday and the Euro rallied accordingly. After closing last week just above 1.2500 the shared currency opens this morning over a full cent higher at 1.2640, with some heavy resistance in the 1.2650-1.2700 band to overcome if it wants to move any higher. A quiet day on the international economic calendar likely means the markets will continue to process the perceived implications of the recent Spanish bailout; with the safe-haven Greenback and Japanese Yen taking general hits across the board, the pair continues to trade in a choppy range, currently at 79.50.

Data releases:

AUD: No data due for release

NZD: Manufacturing Sales q/q

JPY: BSI Manufacturing Index; M2 Money Stock y/y

GBP: No data due for release

EUR: French Industrial Production m/m

USD: No data due for release