Australian Dollar
The Australian Dollar traded sideways for the majority of Fridays Session with investors seemingly unwilling to push it even higher, given its recent strong start to 2012. Despite strong US non-farm payroll data surprising the market on the upside, the unexpected drop in the US Unemployment Rate was not enough to stop the slide of the Australian Dollar as investors sold the Higher-yielding asset to reach an eventual low of 1.0201 against its US Counterpart. With the market facing some strong headwinds out of Europe in the coming days and Local Retail Sales due for release this morning at 11:30am, volatilities are likely to continue for the Nations Currency. Meanwhile this morning we see the Aussie Dollar open around 40 Basis points lower against the Greenback currently trading at a rate of 1.0221

We expect a range today of 1.0180 – 1.0290

New Zealand Dollar
Despite Local equity markets recording minor losses throughout the domestic session on Friday the New Zealand Dollar remained relatively resilient against its US Counterpart trading between a 24 hour range of (0.7773 – 0.7837). In the absence of any local data the Kiwi was well supported off the back of better than expected labour market results in the US with the official unemployment rate falling to its lowest level since Feb 2010. Looking ahead this week Policy Makers from Europe are due to meet in Brussels this evening, where news-flows out of Europe are likely to dominate the short-term direction of the Kiwi as well as broader risk-sentiment. Today sees the New Zealand Dollar open at a very similar rate to where we saw it Friday, currently buying 77.94 US Cents.

We expect a range today of 0.7740 – 0.7850

Great British Pound
UK Stocks rallied on Friday, gaining 0.5 percent, snapping a two a day sell-off. Driving equities higher was a US Report showing unemployment fell close to a 3-year low, boosting optimism that the US recovery story is slowly gaining momentum. Following the announcement the Great British Pound rallied to a high of 1.5525 against its US Counterpart having reached an earlier low of 1.5375. In what is shaping up as a busy week for the Sterling, local data is highlighted by an Interest Rate decision expected out of the Bank of England on Thursday. Meanwhile this morning the Sterling opens slightly weaker against the Australian Dollar (1.5070) and the New Zealand Dollar (1.9759).

We expect a range today of 1.5010 – 1.5150

Majors
In a clear sign that the US economy has not only turned the corner, but is now starting to expand at a moderate rate, US Non-Farm Payrolls released on Friday surprised on the upside with 200,000 new employees entering the labour force, well up on the expected reading of 155 000. Despite the official unemployment rate falling to 8.5 percent, its lowest level seen since February 2009, the strong reading was not enough to push equity and currency markets into positive territory. Overshadowing the positive release it was again fears out of Europe that the Sovereign Debt-Crisis is worsening which drove global risk sentiment. With German Chancellor Angela Merkel and French President Nicolas Sarkozy due to meet for the first time this year in Berlin tomorrow ahead of the first EU Summit on January 30, negotiations to flesh out a new rulebook for fiscal discipline are likely take some time. Continuing the recent vulnerabilities of the EURO in which it has fallen a whopping 9.4 percent in the last six-months, the 17-nation currency lost further ground against its US Counterpart on Friday falling to an overnight low of 1.2696, opening this morning around 30basis points lower from the same time Friday at a rate of 1.2714.

Data releases

AUD:
AIG Construction Index, HIA Home Sales m/m, Retail Sales

NZD: Trade Balance

JPY:
Bank Holiday

GBP: Halifax HPI m/m

EUR:
Sentix Investor Confidence, German Industrial Production, German Trade Balance, French Trade Balance, German WPI m/m.

USD:
Bank Holiday