Australian Dollar
In what was a relatively uneventful day for the Australian Dollar traders seemed unwilling to offer much support for the higher-yielding unit. With the local economic calendar looking very light on data over the coming days the Australian Currency drifted lower for much of yesterday’s session reaching a mid afternoon low of 1.0262 against its US Counterpart. As US and European markets opened for the day further comments from Fitch Ratings Agency warned of significant credit downgrades unless Europe Acts more aggressively to contain its debt. Opening this morning at a rate of 1.0304 the Australian Dollar has struggled to find any solid ground above the 1.03 level having traded between a very tight 70 Basis Point range for the past 24 hours.

We expect a range today of 1.0260 – 1.0350

New Zealand Dollar
Similar to local equities and commodity prices yesterday the New Zealand Dollar finished the day relatively flat. Having traded between a very tight 24-hour range of (0.7924 – 0.7962) against its US Counterpart yesterday, the New Zealand Dollar failed to cover any new ground on the upside. Keeping a lid on global risk sentiment overnight, the Beige Book Survey, released monthly on behalf of the US Fed Reserve showed the US economy expanded at a modest to moderate pace from late November through to the end of December. Coupled with further concerns that Europe is not doing enough to stem the ongoing debt crisis it appears unlikely the New Zealand Dollar will advance above the 0.80 level in the short-term. Meanwhile this morning the Kiwi opens at very similar levels to those seen yesterday, as it currently buys 79.59 US Cents.

We expect a range today of 0.7910 – 0.8010

Great British Pound
The Great British Pound opens significantly weaker this morning at a rate of 1.5317 against its US Counterpart, having lost more than a full US Cent overnight. UK Stocks followed the Sterling lower yesterday, led by a sell-off in utilities and energy companies. In what proved to be a wave of poor results released globally, the US Beige Book Survey disappointed as did EURO-Area GDP. In what ended up being an across the board sell-off for the Sterling, investors nervously await the fallout from the Bank of England Meeting this evening where Mervyn King is widely tipped to keep the official cash rate on hold at 0.50 percent. Meanwhile on the cross-rates this morning the Sterling opens lower also against the Aussie (1.4868) and the Kiwi (1.9241)

We expect a range today of 1.4810 – 1.4950

Majors
US Stocks Fell, Commodities lost ground as the S&P 500 slipped 0.1 percent in overnight trade. Starting in the US, in its Beige Book Business Survey released overnight US Federal Reserve Officials said that the US remained limited given a stagnant housing market and a sluggish Labour Sector. Officials labelled the growth of the US Economy as “moderate and modest” and despite unemployment dropping to 8.5 percent in December down from 9.4 percent a year earlier most industries remained reluctant to hire. Punctuating the optimism from earlier in the week the Greenback appreciated against the Japanese Yen opening stronger this morning at a rate of 76.856. Continuing the ordinary sentiment hanging over markets overnight, in news flows out of Europe Final GDP for the 17-Nation Area also disappointed, with the reading of 0.1 percent well below expectation. In addition to the weak reading further ground was lost following a statement out of Germany’s Federal Statistics Office stating that Europe’s largest economy probably shrank in the final quarter of 2011. With Ratings Agency Fitch also warning of further downgrades, the EURO not surprisingly lost ground against the Greenback yesterday and after trading between a 24 hour range of (1.2661 – 1.2789) opens noticeably weaker this morning at a rate of 1.2695, the lowest level seen in close to 15 months.

Data releases

AUD:
No Data Today

NZD: REINZ HPI m/m

JPY:
Economy Watchers Sentiment, Prelim Machine Tool Orders y/y

GBP: Manufacturing Production m/m, Industrial Production m/m, Official Bank Rate, MPC Rate Statement

EUR:
Industrial Production m/m, French CPI m/m, German Final CPI m/m, ECB Press Conference

USD:
Retails Sales, Unemployment Claims