Australian Dollar
Whilst Asian share markets enjoyed some solid gains in early morning trade yesterday boosting the Australian dollar to a late afternoon high of 1.0125 against its US Counterpart, initial optimism turned to scepticism as the higher yielding asset entered the offshore session. Coming off some impressive gains, Euro weakness, softer commodities combined with dwindling hope that a clear policy road map may not be forthcoming from the European Summit currently underway in Brussels all weighed on the local unit. Drifting to an eventual low of 0.9995 the above average ranges witnessed over the past 24 hours are again likely to continue to overnight with European talks likely to lead to large swings in underlying risk flows and global sentiment. Meanwhile this morning the Aussie dollar opens one third of a cent weaker currently swapping hands at a rate of 1.0040

We expect a range today of 0.9970 – 1.0100

New Zealand Dollar
The New Zealand dollar suffered some noticeable declines in overnight trade as investors nervously await the outcome from the European Summit currently underway in Brussels. After enjoying some modest gains early against its US Counterpart, gains turned to losses with riskier asset classes being sold across the board. Dropping to an eventual low 0.7839 the market is now looking not only for a growth pact out of the 17-nation Euro-zone but a clear unconditional road map which would better enable funding for struggling nations. In what is shaping up as a bumpy 24 hours across markets the kiwi opens weaker this morning currently buying 78.76 US Cents.

We expect a range today of 0.7820 – 0.7930

Great British Pound:
Britain’s economy has fallen back into recession GDP Figures released overnight have shown. In line with the majority of forecasts growth shrank by 0.3 percent between January and March this year essentially igniting speculation the Bank of England will revive stimulus measures when the Central Bank meets next week. Combine such disappointments with a worsening crisis in the euro-zone and its little surprise to the Sterling fall in overnight trade. Sold to an eventual low of 1.5484 against its US Counterpart the ongoing EU Summit in Brussels this evening is likely to further plague the credentials of the Great British Pound as it opens half a cent weaker than the same time yesterday at 1.5513. Meanwhile on the cross rates the Sterling has found some support against both the Aussie (1.5441) and the Kiwi (1.9689), which both open higher.

We expect a range today of 1.5390 – 1.5500

Majors:
Global Stocks retreated overnight with Germany’s unemployment rate rising more than forecast as Spanish and Italian Bond Yields continued to spiral. Europe remained the driver of the market overnight as European Leaders met in Brussels in an attempt to map out a road map for a potential European recovery. Whist immediate help for Span and Italy remain a priority scepticism has continued to grow that Leaders will not be able to make progress towards increased fiscal and political integration, given such moves would require German Chancellor Angela Merkel to make some type of concession on her previously strong stance against joint-liability for European Debt. With the full scale of the ongoing Summit not likely to be known before weeks end the water remain increasingly muddy essentially weighing down the shared currency in the interim. Trading between a 24 hour range of (1.2406 – 1.2523) against its US Counterpart the Euro opens weaker this morning at 1.2440. Meanwhile in addition to EU happenings a string of Data Releases, highlighted by Chicago PMI out of the US this evening, only adds to what is shaping up as a monumental 24 hours.

Data releases

AUD:
Private Sector Credit m/m

NZD: Building Consents m/m

JPY:
Manufacturing PMI, Household Spending y/y, Tokyo Core CPI y/y, Unemployment Rate, Prelim Industrial Production, Housing Starts y/y

GBP: Index of Services 3m/3m, BOE Financial Stability Report, BOE Gov King Speaks

EUR:
Italian Bank Holiday, German Retail Sales m/m, French Consumer Spending m/m, M3 Money Supply y/y, EU Summit

USD:
Chicago PMI, Revised Consumer Sentiment, Personal Spending m/m, Core PCE Price Index m/m