Australian Dollar
The Australian dollar had parity in its sights again last night, although for the third time in as little as a week its attempt was unsuccessful. Earlier in the day Westpac consumer sentiment weighed slightly on the local currency however with a sizeable focus on offshore events the real action did not come until later. Due to optimism that this weekend’s Greek elections will, all of a sudden, not be the catastrophe previously thought, the Aussie swung higher again; that being said, we start today back around 0.9940. Another release of second tier data, this time Melbourne Institute’s inflation expectations, will unlikely have a dramatic effect on the Aussie today and we wait once again to see which way the pendulum will swing this evening.

We expect a range today of 0.9900 – 1.0000

New Zealand Dollar
Optimism ahead of Greek elections this weekend took the New Zealand dollar to highs of 78 cents last night, then a downgrade of Spain’s credit rating turned the tables to see lows near 0.7720. Ups and downs of a very uncertain market become apparent when tracking the Kiwi and once again we start today on a push higher, just above 0.7760 this morning. Today hopefully the Kiwi will be afforded some local influence when the RBNZ meet for their monthly monetary policy meeting. Although expected to leave rates on hold, investors will be watching closely for any clue as to future direction in the accompanying monetary policy statement. Movements against the Australian dollar saw a rally burst higher in the Aussie’s favour although a quick reversal leaves us this morning relatively unchanged at 1.2810 (0.7806).

We expect a range today of 0.7710 – 0.7800

Great British Pound
A swing to positive territory for risk sentiment, combined with a weak Greenback following disappointing retail sales, carried the Pound to highs near 1.5590 last night although it was unable to break through despite two attempts. A move lower as markets reacted to the Moody’s downgrade of Spain leaves us at 1.5510 this morning and with a lack of local data to move Sterling it will continue to move with market sentiment and according to strength of the US Dollar. Slipping against the Aussie and the Kiwi, the Pound currently buys A$1.559 and NZ$1.999.

We expect a range today of 1.5540 – 1.5660

Majors
The euro dollar closed higher for its second consecutive day yesterday, finishing the North American session at 1.2555 after trading as high as $1.26 earlier on. A combination of short-covering ahead of this weekend’s Greek elections, speculation officials may consider relaxing Greece’s austerity program post-election and weak US retail sales fuelled the gains. Looking ahead today, the ECB are scheduled to release its monthly bulletin ahead of European and US inflation data. Although with uncertainty still ever-present in the markets, the safe-haven Greenback and Japanese Yen are still likely to hold the edge over riskier assets into the weekend; the pair themselves trade this morning at 79.40. Bank of Japan is set to kick off its two day monthly monetary policy meeting today, and any hint of an intervention could pose a downside risk to the Yen.

Data releases:

AUD: MI Inflation Expectations

NZD: Official Cash Rate; RBNZ Rate Statement; FPI m/m

JPY: Revised Industrial Production m/m

GBP: CB Leading Index m/m

EUR: ECB Monthly Bulletin; CPI y/y

USD: CPI m/m; Unemployment Claims; Current Account