Australian Dollar:
A mixed session for the Asian region saw the Australian dollar post tentative gains towards 1.0200 early on before disappointing Chinese manufacturing figures sent the local unit lower. Forming short-term support at 1.0150, it was here the Australian dollar traded for most of the afternoon before lifting ever so slightly on the open of European markets. Despite its early gains manufacturing data again came into focus, this time from Europe and the US essentially triggering a solid sell off in the higher yielding asset. Dropping to an overnight low of 1.0047, risk sentiment has been further battered this morning following Moody’s downgrade of Credit Suisse, the second largest Swiss Bank. Today, keeping in mind Chinese markets are closed in observance of the Dragon Boat Festival we expect a relatvely subdued session with downside support kicking in around 1.0020

We expect a range today of 1.0000 – 1.0120

New Zealand Dollar:

The New Zealand dollar has traded above 80 cents for the first time since May 4th after yesterday’s GDP figures showed the local economy to have grown 1.1% in the first quarter of this year. A mixed day for the Asian region however saw the Kiwi quickly pare gains following disappointing manufacturing figures out of China and by early afternoon the currency had fallen back to 0.7960. In overnight trade investors flocked for safe-haven units, the move mainly driven by weak data releases out the US and Europe, credit downgrades in Switzerland as well as ongoing debt fears out of Italy and Spain. Opening this morning at 0.7874 against the Greenback, the local calendar features NBNZ business confidence figures to potentially lend direction for the Kiwi into the end of the week..

We expect a range today of 0.7830 – 0.7930

Great British Pound
Given the mood of investors is still greatly shaped by underlying concerns that Italy and Spain, which account for more than a quarter of the euro-area economy are heading for a full-blown bailout within the next 12 months, it was was little surprise to see the Great British Pound sold off in overnight trade. Further dampening the mood, Moody’s Rating agency downgraded Credit Suisse, the second largest Swiss Bank by a staggering three levels, the maximum reduction avaliable. Dropping to an overnight low of 1.5577 against its US Counterpart the Sterling has recovered very little this morning as it opens noticably lower at a rate of 1.5595. Despite its noticable fall against the worlds reserve currency the Sterling finds some upside against a weaker Aussie and Kiwi with both crosses opening stronger at a rate of 1.5517 and 1.9796 respectively

We expect a range today of 1.5460 – 1.5570

Majors:
US Stocks tumbled overnight as did commodities following a string of disapointing manufacturing releases out of China and Europe. In further signs that China’s economy is losing momentum manfuacturing PMI came in below expectation detoriating even more the underlying growth picture. Whilst markets were greatly disapointed by the US Federal Reserve’s decision on Wednesday not to roll out QE3, investors are reluctant to give up completely on further stimulus should the worlds largest economy continue to show signs of weakness. With an overall shift towards safe-haven units, investors sought the deepest and most secure holdings overnight as the US Dollar opens stronger against the Japanese Yen at a rate of 80.234. Jumping across to the Euro-zone and the story becomes even uglier, Flash Services PMI and Flash Manufacturing shrank at their fastest pace in 3 years as the shared currency lost substantial ground against the Greenback. Trading between a 24 hour range of (1.2530 – 1.2704) the Euro opens one and a half cents lower this morning at a rate of 1.2545. Given a relatively quite economic calender this evening, market sentiment is again likely to be dictated by Europe’s peripherial debt and bond markets

Data releases

AUD:
No data today

NZD: Visitor Arrivals m/m

JPY:
No data today

GBP: MPC Member Weale speaks

EUR:
German Ifo Business Climate

USD:
No Data Today