Australian Dollar
In a relatively uneventful day for the Australian dollar, the higher-yielding currency failed to find much support overnight Friday, trading to a late session low of 1.0007 against its US Counterpart. Given the flow of softer than expected data continued in the form of Manufacturing PMI out of China earlier in the week, a decision by the US Federal Reserve to hold off rolling out QE3 has also done little to improve the prospects of the riskier-backed asset. Looking ahead this week given the local economic docket remains thin, direction is again likely to be largely dictated by the short-term bond markets throughout Europe. Opening this morning at a very similiar level to where we left it Friday, the Australian dollar is currently swapping hands at a rate of 1.0040, as parity again becomes it’s next critical level on the downside.

We expect a range today of 0.9980 – 1.0080

New Zealand Dollar:

Holding close to a seven week high against its US Counterpart on Friday the New Zealand dollar enjoyed a session of consolidation. Bouncing 30 basis points either side of the 0.7870 mark, in a summit held in Rome over the weekend, European leaders agreed to increase their efforts to boost the region’s growth by rolling out a plan worth up to 130 billion Euros. Opening this morning currently buying 78.80 US Cents the New Zealand dollar has jumped many hurdles over the past week with a string of economic announcements highlighted by Trade Balance figures which are due for release tomorrow. Meanwhile today ranges are again likely to remain subdued in the absence of any flare ups out of Europe.

We expect a range today of 0.7830 – 0.7940

Great British Pound
In what was an ordinary week for the Great British Pound, a notable change in sentiment out of The Bank of England became known on Wednesday following the release of Monetary Policy Commitee minutes which have suggested a much more dovish Central Bank over coming periods. With growth concerns now at the forefront of investors minds the Sterling did well to cap a week of losses on Friday as it traded between a tight 24 hour range of (1.5556 – 1.5634) against its US Counterpart. In what was session of consolidation for the Sterling advances were limited only against the Greenback as we open lower against both the Australian dollar (1.5504) and the New Zealand dollar (1.9732)

We expect a range today of 1.5450 – 1.5560

Majors:
US Stocks rebounded on Friday assisted by European Leaders which met in Rome over the weekend. Whilst German Chancellor Angela Merkel again resisted calls for Euro-Zone bonds the overall outcome of the meeting was well received by markets as leaders agreed to a European Growth Plan worth up to 130 Billion Euros. Having successfully negotiated Greek elections earlier in the week the 17-Nation Euro stopped to take a breath on Friday trading between a tight 24 hour range of (1.2518 – 1.2582) against its US Counterpart. Despite its day of consolidation the downward bias still remains in tact for the shared currency as traders continue to look for further developments in the Euro-Zone fiscal and finacial crisis. In line which such themes the Greenback continued its trend of capitlising on safety fears as existing home sales as well as the Philly Fed Manufacturing Index also disapointed traders. With prayers for QE3 remaining unanswered last week, the US Federal Reserve will again look to pull the trigger only if further soft data is forthcoming. Meanwhile this morning the Greenback opens stronger against the Japanese Yen at a rate of 80.41.

Data releases

AUD:
RBA Assist Gov Debelle Speaks

NZD: No Data Tody

JPY:
CSPI y/y

GBP: Public Sector Net Borrowing, Inflation Report Hearing

EUR:
Gfk German Consumer Climate, Italian Retail Sales m/m

USD:
CB Consumer Confidence