Australian Dollar
New building approvals decreased by 0.9% in January, falling short of market expectations of 2.1% and causing the Australian Dollar to dip 20 points on the news. Also contributing to the move was a decrease in new capital expenditure made by private businesses as they tighten purse strings to weather the ongoing two-speed economy. Dipping only briefly to intraday support of 1.0730, the Aussie soon set out on a trek higher as expansion in the growth of the Chinese manufacturing sector was reported. Further Greenback weakness sent the Australian Dollar to highs just above 1.0800 however we open slight below here this morning at 1.0790. In what looks like to be a quiet Friday, the Aussie could potentially struggle to find further momentum as markets sit back to consolidate the week’s events.

We expect a range today of 1.0750 – 1.0830

New Zealand Dollar
The dairy industry has pushed New Zealand’s export volumes to their highest level since the Overseas Trade Indices were established as a barometer in 1990. Rising 2.9% in the December quarter, the New Zealand Dollar rallied of the report released by Statistics New Zealand meeting resistance just above 0.8360. While initially unable to break through, later Greenback weakness meant the Kiwi was successful on second attempt and after peaking very close to 0.8400 we open this morning at 0.8380. The Australian Dollar has had a solid performance over the past 24 hours and thus the Kiwi has slipped on the cross rate to 1.2875 (0.7767).

We expect a range today of 0.8360 – 0.8420

Great British Pound
Growth in the UK’s manufacturing sector fell back in the month of January, as the purchasing manager’s index (PMI) reported a 51.2. After December’s 52.0 markets were expecting similar growth and thus Sterling came under pressure after these expectations were not met. Dipping back to support at 1.5900 Cable then bounced higher from here helped along by Greenback weakness stemming from some of its own softer than expected fundamental releases. Opening levels into the final day of the week stand at 1.5950 and Sterling predictably sits lower against its antipodean counterparts in the light of a moderate increase in risk sentiment. GBP/AUD trades at 1.4770 and GBP/NZD at 1.9020.

We expect a range today of 1.4710 – 1.4850

Majors
The Greenback has slipped over the previous 24 hours as an increase in the rate of expansion for Chinese manufacturing boosted risk sentiment and local US data was softer than expected. With investors moving away from safe haven assets such as the US Dollar post Chinese Manufacturing, a subsequent fall in US manufacturing PMI from 54.1 to 52.4 added to the Greenback’s weakness. With the Japanese Yen closely linked to Asian growth, the USD/JPY pair moved back below 80.90, although with foreign investment looking more attractive to the Japanese people as the world economy improves the Yen conceded some of these gains to move back above 81.00. The Euro rallied moderately throughout Asian hours to 1.3350 however a manufacturing index of 49.0 for the indebted region, an increase in unemployment to 10.7% and a rise in inflation to 2.7% painted only a difficult picture for the European people. Finding it difficult to capitalise on Greenback weakness the Euro has slipped from daily highs back towards the 1.3300 handle.

Data releases:

AUD: No data due for release

NZD: ANZ Commodity Prices m/m

JPY: Household Spending y/y; National Core CPI y/y; Unemployment Rate

GBP: Construction PMI

EUR: German Retail Sales m/m; PPI m/m

USD: No data due for release