Australian Dollar
Following a relatively flat start to the day in which local equity markets gained around half a percent, the Australian Dollar weakened slightly against its US Counterpart reaching a later afternoon low of 1.0382. Despite its slow start, the Australian Currency came to life late in the US Session, well supported by better than expected European Bond Sales which have temporarily eased concerns over the regions ongoing fiscal crisis.

Following the auction the Australian Dollar managed to reach an overnight high of 1.0487, capping a week in which the local currency finished higher to record its fifth consecutive week of gains, its longest winning streak since April 2011. Opening this morning around half a cent stronger at a rate of 1.0480, the local economic calendar is highlighted this week with Inflationary Data due for this release Wednesday.

We expect a range today of 1.0410 – 1.0510

New Zealand Dollar
The New Zealand Dollar continued its recent appreciation against its US Counterpart on Friday as it opens stronger this morning currently swapping hands a rate of 0.8059. After drifting sideways for much of the local session, overseas investors snapped up the higher yielding currency, driving it to an overnight high of 0.8062. Kick starting the rally late in offshore trade, France and Spain successfully sold 14.6 billion EURO’s worth of bonds, which has again seen borrowing costs drop significantly for the second consecutive bond auction. Looking ahead this week the New Zealand Dollar has done very well to sustain gains above 80 US Cents as investors await an interest rate decision which is expected out of the Bank of New Zealand on Thursday, the Central Bank is widely tipped to maintain the current benchmark cash-rate at 2.5 percent

We expect a range today of 0.8000 -0.8100

Great British Pound
In a report released Friday, UK Retail Sales rose in December by 0.6 percent, matching the forecast of most economists. Combined with some positive bond auctions out of Europe, the Great British Pound enjoyed some upside on Friday rallying over a full cent to reach an eventual high of 1.5571 against its US Counterpart.

With local GDP expected for release on Wednesday attention is likely to remain on domestic happenings over coming days. Capping what can only be described as an overall positive session for the Sterling, the Great British opens stronger this morning against the Greenback (1.5571) and the New Zealand Dollar (1.9303), however flat against the Australian Dollar at rate of 1.4847.

We expect a range today of 1.4790 – 1.4920

Majors
Global equities gained half to a full percent on Friday as Spain and France both successfully sold 14.6 billion EURO worth of bonds. With lower borrowing costs temporarily sidelining fears of further fiscal and debt contagion, Europe has for the early parts of this year showed some very real signs of stabilizing. Following the successful auction, the EURO received some much needed support and after reaching an earlier low of 1.2886 against its US Counterpart was snapped up by investors reaching an eventual high of 1.2985. Running into some stiff resistance around the 1.30 Level, the medium-term outlook for the 17-Nation currency still remains relatively bearish.

In the US on Friday evening a handful of data releases, in particular The Philly Fed Manufacturing Index and December CPI Figures both came in below forecast with a report due out later this week expected to show annualised growth figures of 3 percent. With reporting season also continuing this week, the US Recovery story is slowing starting to gain pace despite the strong headwinds it continues to experience out of Europe. Meanwhile this morning the US Currency opens stronger against the Japanese Yen at a rate of 76.959.

Data releases

AUD:
PPI q/q

NZD: No Data Today

JPY:
No Data Today

GBP:No Data Today

EUR:
German Import Prices m/m

USD:
No Data Today