:: Australian Dollar: The Aussie is taking no prisoners so far this week, continuing its rally from yesterday's open of 0.9362 to push through 0.9450 by the end of the Asian session. Currently the best performing of the major currencies, confidence in the AUD was sought from RBA Governor Steven's words yesterday with the market pricing in an increased likelihood of an interest rate rise in October and November. An advance in US stocks and risk appetite overnight added fuel to the fire, reaching its highest level since July 2008 at 0.9493 during the North American session. The US markets saw consumer-reliant companies leading the surge in the S&P 500, suggesting that the economic recovery is continuing. Today we look to the release of the RBA minutes, where investors will be listening keenly to the Reserve Bank's view on monetary policy and economic conditions; in the event of a hawkish outlook we may see the AUD test 0.9500 resistance with intraday support lying at 0.9430. This evening the markets attention will turn stateside with the U.S Federal Reserve bank meeting and the accompanying rhetoric to be closely scrutinised.

- We expect a range today in the AUD/USD rate of 0.9420 to 0.9500

:: Great Britain Pound: The Pound Sterling failed to hold on to early offshore gains shedding 150 points from its high of 1.5685 to trade at a low of 1.5535 overnight. Concerns about Ireland, Portugal and Greece ability to finance its debt obligations this week weighed on sentiment towards the Euro-zone taking the GBP/USD down with it. Adding to the selling was a drop in preliminary U.K Mortgage approvals as measured by the BoE comprised of data which showed a decline in new loan approvals from 47k to 45k. This morning sees the Pound open at 1.5550 and 1.6425 against the U.S and Australia respectively.

- We expect a range today in the GBP/AUD rate of 1.6375 to 1.6475

:: New Zealand Dollar: The Kiwi rallied from 0.7250 in Asia yesterday to enter offshore pressing against the 73 cent level. Slightly better than expected second tier data out of N.Z helped however it was news across the Tasman that spurred the majority of the demand. The governor of the Australian central bank signalled an increased likelihood of another interest rate increase sighting heightened inflationary pressures as a concern. The comments increased demand for both the AUD and NZD against the USD with offshore markets eventually taking NZD/USD to a high of 0.7320 before settling around the 73 cent handle on the open. With the Aussie dollar continuing to rally the AUD/NZD cross rate touched 1.3 overnight for the first time since April with today's release of the RBA board minutes likely to add further support on the cross.

- We expect a range today in the NZD/USD rate of 0.7250 to 0.7325

:: Majors: The Euro rallied against the Greenback to exchange back above the 1.3100 handle during early European on the back some renewed optimism that a European sovereign default would be avoided. With concern over the weekend about the state of Ireland's finances comments from European Union economic and monetary commissioner Olli Rehn overnight that he was confident officials will "repair" the nation's financial system were positively received initially boosting the Euro. Investors took profit however and sold EUR/USD back down as yield spreads on bond markets widened to record levels ahead of this week's Irish, Greek and Portuguese debt auctions. Critical technical support ahead of 1.3020 held once again and the EUR/USD opens in Asia this morning at 1.3065 with all eyes now on this evenings U.S Federal Reserve Bank meeting. The Fed is expected to make no changes to policy and reiterate that high unemployment and low inflation warrant low interest rates for an "extended period". The market will however be anticipating any comments that may shed some more light on further QE measures and the possible timing of such moves. USD/JPY remains range bound seemingly comfortable bouncing between 85.25 and 85.95 for the time being however a break seems imminent and this evenings announcement could just the catalyst for another move higher.

:: Data Releases:

  • AUD: RBA Board Minutes
  • NZD: Aug Credit Card Spending
  • USD: FOMC Meeting, Aug Building Permits and Aug Housing Starts
  • GBP: Aug Public Sector Net Borrowing
  • EUR: No data expected today
  • JPY: Jul Leading Index