Australian Dollar:
The short term down-trend in the Aussie continued on Monday morning following a drop in job advertisements according to a report from ANZ. The report showed job ads fell by 3.8% in December, the 10th straight drop, and doesn’t provide positive signs for the Bureau of Statistic figures that will be released on Thursday. Also released yesterday was a private report on inflation which showed an increase in consumer prices but still well within the RBA’s target range of 2-3%. The TD Securities-Melbourne Institute figures showed an increase of 0.4% in November while a report on Home Loans dropped by 0.5% despite an expected gain. The Aussie initially fell to the key support level around 1.0525 but the lows on the Aussie didn’t last much beyond midday however, and we found ourselves drifting up on the back of a strengthening Euro along with various Fed comments throughout the afternoon and night. Even still the local unit has been held in a tight range and we find it this morning close to its overnight highs at 1.0565.

We expect a range today of 1.0520 – 1.0595

New Zealand Dollar:
The Kiwi was one of the better performing currencies yesterday gaining from morning lows of 0.8370 to eventually reach highs above 0.8420. During a 24 hour period which has seen volatility pull back across the board the Kiwi did well to have a 50 point range and this was mostly due to data releases showing an increase in credit card spending. A Statistics NZ report yesterday showed an increase in credit card spending of 0.3% for the month of December which the market seemed to like but comments from retailers indicates was still disappointing overall. Overnight comments from several Fed members saw an increase in bets on the likely continued easing by the Fed into next year which in turn saw further weakening in the USD. This morning we open at 0.8420 while we have Bernanke speaking which will likely take most of the focus although markets will also take a look at local housing and food prices data.

We expect a range today of 0.8380 – 0.8460

Great British Pound:
The pound has continued to underperform against its European major counterpart and this has seen a general weakening across the board for the Sterling. Focus remains on David Cameron and the changing relationship between the UK and Europe and the development of this story has seen EUR/GBP reaching April 2012 highs above 0.8320. Even with most currencies gaining against the USD on the back of dovish Fed member comments the cable remains stuck below 1.6100 as investors sell the pound and buy Euro. On the south pacific cross we find the pound weaker against both the AUD (1.5210) and the NZD (1.9060). Tonight we have quite a busy night data wise both locally and in Europe as a whole with the highlights being UK inflation data and Producer Price Index.

We expect a range today of 1.5165– 1.5240

Majors:
A relatively quiet day data wise has seen much of the focus turn comments made by key individuals over the last 24 hours. The market’s main focus will be on one still yet to be delivered, Bernanke’s, which is due to begin shortly, but we have also had other members of the Fed as well as Obama, Australia Treasurer Swan and the flow on effects from comments from Japan Prime Minister Abe on Sunday. In a speech earlier this morning, Obama applied pressure to congress to sort out the debt ceiling issue as quickly as possible suggesting any delay could hurt financial markets and pointed out that raising the ceiling should be about paying America’s debts and not start a debate on spending cuts. The comments were full of political rhetoric and likely the first of many over the coming month and as such markets didn’t react much, bigger reaction was in fact seen by comments made by several members of the Fed at different times through the day. Most notably, Evans who praised the recent releases from the Fed that provided exact figures for guidance on what conditions would see the end to further easing (employment or inflation) while countering that optimism was Fed member Williams who forecasted high unemployment meaning stimulus would continue for years to come. On the data front we have seen a pullback in European industrial production which came in at -0.3%, versus expectations of a small gain; this saw EUR fall below 1.3350 before the ‘USD negative’ Fed comments saw it gain back towards 1.3385. USD/JPY seems to have stabilised in the short term and is currently at 89.40.

Data releases:

AUD:
No data today

NZD:
Food prices

JPY:
Money stock

GBP:
Consumer price index, producer price index, retail price index

EUR:
German CPI, Eurozone Trade Balance

USD:
Advance retail sales, PPI ex food and energy, Business inventories, Empire manufacturing