Australian Dollar
The Australian Dollar enjoyed some considerable upside movement yesterday, soaring above $US1.05 to a 12 week high against its US Counterpart. Despite data released locally which showed prices paid by Australian Producers rose at a slower than expected pace, the higher yielding currency was snapped up by investors driven by optimism out of Europe that Greece will reach a deal with its creditors to avoid a default. After earlier opening the day at a rate of 1.0477, the Australian Dollar covered some solid ground breaking through the 1.05 level to reach an eventual high of 1.0572. Opening this morning stronger at a rate of 1.0534, any continuation of positive economic outcomes out the US should lead to further support for the Australian Currency.

We expect a range today of 1.0480 – 1.0580

New Zealand Dollar
With little in the form of local economic data driving the direction of New Zealand Dollar of late, the Kiwi has again benefitted from improved stability out of Europe. In overnight happenings a meeting between finance ministers in Brussels, delivered some positive outcomes for assets deemed riskier in nature with Policy Makers working towards a bid to lighten Greece’s debt Burden. After enjoying a consistent upward run for most of the domestic session the New Zealand Dollar finally ran out of steam, reaching an eventual high of 0.8141 against its US Counterpart. This morning sees the Kiwi opening higher however struggling to hold onto gains above the 81 US Cents level, currently swapping hands at a rate of 0.8101.

We expect a range today of 0.8050 – 0.8150

Great British Pound
The Great British Pound remained relatively range bound yesterday trading between a tight 24-hour band of (1.5516 – 1.5601) against its US Counterpart. Despite the generally directionless session for the Nations Currency, the Sterling has come under some increasingly strong selling pressure recently given the string of soft data which has plagued the UK economy. Further compounding the woes of the Sterling investors remain cautious ahead of The Bank of England Minutes which are due release overnight Wednesday, which may signal the intensions of Policy Makers to provide the UK economy with further stimulus. Meanwhile this morning the Sterling opens weaker against 12 of it 16 major counterparties including the Australian Dollar (1.4769) and the New Zealand Dollar (1.9200).

We expect a range today of 1.4710 – 1.4840

Majors
Global equities struggled to make up their mind in overnight trade, with the S&P500 earlier rallying as much 0.5 percent before closing in the red around 0.8 percent lower. Hogging much of the market’s attention overnight were talks held in Brussels, where Finance Ministers met to discuss ways to fight the ongoing Fiscal Crisis which has threatened the stability of the broader 17 Nation EURO for the past 24 months. With Greece bargaining with bondholders over debt relief, the major news out the meeting involved the idea of Germany to boost the combined aid limit from 500 billion EUROS which would see the establishment of both a temporary and a permanent bailout fund run alongside each other. The beefed-up funds would essentially serve as a stronger fire-wall should borrowing costs escalate. Whatever was said overnight investors liked what they heard with the EURO gaining well over a cent and after trading between a 24 hour range of ( 1.2874 – 1.3052 ) opens this morning surprisingly back above the 1.30 level, currently trading at a rate of 1.3019. Meanwhile in the US overnight, reporting season has continued without a hitch with investors keen to see the underlying GDP figures due for release later in the week to ascertain whether the string of solid data releases over the past quarter has translated into actual real growth for the US economy. On the currency front the US Dollar also appreciated overnight, opening stronger against the Japanese Yen this morning at a rate of 77.006

Data releases

AUD:
CB Leading Index m/m

NZD: No Data Today

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

GBP: Public Sector Net Borrowing

EUR:
French Flash Manufacturing Index PMI, French Flash Services PMI, German Flash Manufacturing Index PMI, German Flash Services PMI, ECOFIN Meetings, Industrial New Orders m/m

USD:
Richmond Manufacturing Index