Australian Dollar:
Unmoved by comments made by US Federal Reserve Chairman Ben Bernanke overnight on Monday the Australian dollar remained range bound for much of yesterday’s session. Bouncing between a high of 1.0568 and a low of 1.0525 against its US Counterpart, Bernanke did fire a warning to his own government encouraging them to stop squabbling over the debt ceiling which continues to once again engulf global financial markets. Continuing its intraday form the Australian dollar remained solid overnight despite further threats of another battle in Washington which pushed global markets lower. Whilst a manufacturing index in the US also came in below expectation the Australian dollar opens virtually unchanged this morning at 1.0560. On the outlook today a Westpac Consumer Sentiment reading due for release this morning remains the highlight on the data front.

We expect a range today of 1.0530 – 1.0590

New Zealand Dollar
In a quarterly survey released yesterday business opinion showed economic activity surged in December to its highest level since mid -2007. Suggesting GDP growth for 2012 may come in above 2 percent the New Zealand dollar remained well supported intraday unaffected by Ben Bernanke’s speech which made no mention of existing Fed Policy. Despite holding above the 84 US Cents level for much of the day global demand for riskier assets weakened overnight as further battles surrounding debt ceiling negotiations once again played there part in triggering a sell off. This morning sees the New Zealand dollar a third of one US Cent weaker at 0.8390.

We expect a range today of 0.8360 – 0.8420

Great British Pound:
Consumer prices rose 2.7 percent from a year earlier, figures yesterday revealed. Remaining above the Bank of England’s target of 2 percent, the highest figure seen since May last year, the high reading is predominantly being blamed on increases to gas and electricity bills. Providing a further hurdle to Britain’s economy which is trying to emerge from a double dip recession, adding stimulus has now become an even more difficult task in the face of added price pressures. Falling against its US Counterpart yesterday the Great British Pound opens weaker this morning at a rate of 1.6058. In a relatively mixed session the Sterling is weaker also when compared to the Australian dollar (1.5202) however stronger against the Kiwi (1.9132).

We expect a range today of 1.5170 – 1.5230

Majors:
In a busy session overnight US Stocks fell, accelerating losses in the S&P 500 as concerns over US debt ceiling discussions continued. In what’s becoming an all too familiar story, despite the warnings Congress are once again like to be the catalyst for added uncertainty across markets, threatening to push investors to the very edge. In economic data releases Manufacturing in New York contracted in January for a sixth straight month whilst Retail Sales in the world’s largest economy rose by 0.5 percent in December. Overall despite the mixed bag of results nothing could trump the effects the debt debate in Congress as the Greenback continued to weaken across the board. Jumping across to Europe, the shared unit declined to a low of 1.3262 against its US Counterpart after a preliminary estimate revealed German GDP may have dropped as much as 0.5 percent in the final quarter of 2012. Opening almost a cent below where we left it yesterday the Euro is currently trading at 1.3295. Providing further fireworks across currency markets the JPY was another big mover yesterday moving from highs of 89.62 to a low of 88.27 after comments from Japan’s economic minister that “excessive yen weakness can have a negative influence on people’s livelihood”.

Data releases

AUD:
Westpac Consumer Sentiment, New Motor Vehicle Sales m/m

NZD: No data today

JPY:
Core Machinery Orders m/m, Consumer Confidence

GBP: No data today

EUR:
CPI y/y, German 10-yr bond auction

USD:
CORE CPI m/m, TIC Long-term purchases, Capacity Utilization rate, Industrial Production m/m