Australian Dollar:
In positive news from Australia’s largest trading partner China’s economy grew at 7.9 percent in the final quarter of 2012 comfortably topping the forecasted figure of 7.8 percent. Whilst Industrial production also increased by 10.3 percent the reaction of the Australian dollar was generally muted. Trading lower for much of Friday’s session against the Greenback, lows of 1.0484 were contrasted by a four year high against the Japanese Yen which continues to weaken ahead of reports the Bank of Japan will roll out fresh stimulus when they meet over the coming days. Stealing the thunder on Friday, Yen weakness hogged the attention of investors with the Aussie dollar opening generally weaker this morning clinging to a rate of 1.0505 against its US Counterpart. On the outlook this week CPI figures due for release tomorrow will be paramount for the local unit given a stronger than expected reading may sideline talks of further rate cuts from the RBA

We expect a range today of 1.0470 – 1.0540

New Zealand Dollar
In figures released on Friday The Consumer Price Index fell by 0.2 percent in the final quarter of last year, well below expectation. Dropping the final year result to a mere 0.8 percent, the weak figure is being blamed predominantly on cheaper food prices which dropped a full 1.8 percent y/y. In a classic shift away from traditionally riskier currencies a weaker Euro and Yen were both to blame for the Kiwi which struggled to keep its head above water when compared to the Greenback on Friday. Despite stronger than expected growth figures in China, mixed economic releases from Europe and the US both plagued the prospects of the Kiwi which opens virtually unchanged this morning, currently buying 83.61 US Cents.

We expect a range today of 0.8320 – 0.8390

Great British Pound:
British Retail Sales slumped in December contracting by 0.1 percent. Fuelling concerns that Britain’s economy is headed for another recession the figure is even more alarming given the boost Christmas was expected to deliver. Shifting lower in a big way overnight on Friday the Sterling slumped more than a full cent against the Greenback to 1.5852. Failing to recover any of these losses the Great British Pounds opens noticeably weaker this morning at 1.5862. Meanwhile on the Cross Rates the Sterling has also lost ground against both the Aussie (1.5101) and the Kiwi (1.8963).

We expect a range today of 1.5820 – 1.5890

Majors:
US Stocks along with the S&P 500 both rose on Friday, sending the Dow Jones industrial average to its highest level in more than five years. Whilst equities did rally the same cannot be said for handful of major currencies. Despite market rumours spreading that the Republicans will vote next week on a decision to increase the debt-limit, news from the world’s largest economy was generally mixed on Friday after a gauge of consumer sentiment declined to 71.3 with concerns over the fiscal-cliff being the main reason for the grim outlook. Advancing to a high of 90.19 against the Yen, sellers have once again flooded the market amid speculation the BOJ will announce substantial stimulus measures when they meet over the coming two days. Jumping across to Europe and it was a familiar story for the shared unit which shed value from earlier highs of 1.3397 against its US Counterpart. Despite no new signs of economic stress throughout the region there was a hint of profit taking in markets on Friday given the long weekend across US markets. Meanwhile this morning the Euro opens weaker at 1.3310 ahead of Eurogroup meetings which are due to commence this evening.

Data releases

AUD:
No data today

NZD: No data today

JPY:
Monetary Policy Statement, Overnight Call Rate, BOJ Press Conference

GBP: Public Sector Net Borrowing, CBI Industrial Order Expectations

EUR:
German ZEW Economic Sentiment, ZEW Economic Sentiment, Spanish HPI q/q

USD:
Bank Holiday