Australian Dollar:
Taking investors by surprise yesterday the Australian dollar plummeted intraday falling from an opening level of 1.0201 against the Greenback to a low of 1.0114, its weakest point since July year. Triggering the sell off China’s Central Bank announced that it would be clamping down on speculative property purchases, raising questions on the negative influence this is likely to have on growth. Despite the local share market which shed 1.5 percent, the second biggest fall of the year the Australian dollar has managed to regain some of its earlier losses throughout North American trade. With speculation mounting that the US Federal Reserve will continue stimulus measures Greenback weakness has once again done the Aussie a favour. Opening this morning overall weaker at a rate of 1.0189 it’s expected that the Reserve Bank of Australia will leave rates on hold when they meet at 2:30pm this afternoon.

We expect a range today of 1.0150 – 1.0220

New Zealand Dollar
The resilience of the New Zealand dollar was once again on show yesterday given the currencies rebound from an earlier sell off. Reaching intraday lows of 0.8191 against its US Counterpart following disappointing services data from China the New Zealand dollar has staged a remarkable recovery overnight not only recapturing earlier losses but opening overall stronger this morning, by 40 basis points, at a rate of 0.8271. With bond yields in Italy once again flaring overnight along with key Central Bank meetings expected later this week the New Zealand dollar is set to remain at the mercy of global risk sentiment with hints of weakness within the US Dollar likely to benefit the Kiwi.

We expect a range today of 0.8230 – 0.8300

Great British Pound:
Compounding the woes for the British economy, UK construction PMI hit its lowest level since October 2009, figures overnight revealed. Given construction output fell in February at its fastest pace in more than three years the performance of the Great British Pound has surprised investors as it rallied against its US Counterpart. Suggesting that markets are happy to keep the Sterling up above the key 1.50 level, the Sterling opens this morning half a cent stronger at 1.5108. Similar to a handful of its major counterpart’s ongoing speculation that the US Federal Reserve will continue with stimulus measures has kept the US dollar recovery story at bay early this week. Meanwhile against the Australian dollar the Sterling is weaker this morning at 1.4824 whilst unchanged when valued against the Kiwi 1.8268.

We expect a range today of 1.4800 – 1.4850

Majors:
US Stocks rose overnight that is despite the fact automatic spending cuts went into full effect as of March 1. Whilst lasting implications of the $85 billon drop in government spending are not likely to become known for some time, the next dead line over fiscal cliff negotiations is fast approaching, with the issue expected to be revisited on March 27. Despite the optimism surrounding equity markets concerns were raised overnight as China announced plans to have tighter concerns on its property sector, weakening the prospects of accelerated growth. Whilst there was little in the form of economic data to drive direction the familiar worries over global growth and where it will come from (if you take China out the equation) have once again resurfaced. Jumping across to Europe and the Shared Unit has remained relatively unchanged over the past 24 hours trading between a range of 1.2981 – 1.3030 against its US Counterpart. With the 1.30 mark shaping as a critical support level for the Euro, Italian bond yields which continue to rise will be closely monitoring. Looking ahead this week key Central Bank meetings including the BOJ, BOE and ECB are poised to be key risk events for broader currency markets.

Data releases

AUD:
AIG Service Index, Retail Sales m/m, Current Account, Cash Rate, RBA Rate Statement

NZD: No data today

JPY:
Average Cash Earnings y/y

GBP: Halifax HPI m/m

EUR:
Spanish Services PMI, Italian Services PMI, Final Services PMI, ECONFIN Meetings, Retails Sales m/m

USD:
ISM Non-manufacturing PMI,