Australian Dollar: The Australian Dollar hit parity against the greenback overnight surging briefly to a high around the 1.0020 area. We open at 0.9985 this morning. Horse racing was off the agenda yesterday afternoon as local markets absorbed the somewhat surprising decision by the Reserve Bank to raise the official cash rate by 25 basis points to 4.75 per cent. The Aussie immediately soared a full U.S. cent to trade within a whisker of parity hitting 0.9993 and hovering around the 0.9980 until early in the European session. In the accompanying statement, RBA governor Glenn Stevens noted that "the moderation in inflation that has been underway for the past two years is probably now close to ending" and that "growth in wages has picked up somewhat".

We expect a range today of 0.9960 - 1.0030

New Zealand Dollar: The kiwi has endured a volatile 24 hours briefly hitting a 27-month high of 0.7690 during local trade on Tuesday as it followed a stronger Australian Dollar. The unit retreated and headed into the offshore session around 0.7650 ahead of another strong rally above US77 cents as the greenback softened once more. Earlier in the local session, the labour cost index showed salary and wage rates, including overtime, grew 1.6 per cent in the year to the September, which took the currency down to 0.7635. The kiwi opens at 0.7700 against the greenback and a shade lower against the Australian Dollar this morning at 0.7715.

We expect a range today of 0.7680 - 0.7750

Great British Pound: Pound Sterling (1.6015) moved lower against several major currencies overnight after weaker-than-expected economic data. A key survey of companies by Markit Economics Ltd revealed the October construction purchasing managers index fell to 51.6 from 53.8 the previous month. The Bank of England meet tomorrow night to decide on interest rates and any further debt-buying initiatives. Meanwhile, the pound opens sharply weaker against both the Australian Dollar (1.6030) and the New Zealand Dollar (2.0780).

We expect a range today of 1.5950 - 1.6050

Majors: The greenback was largely weaker overnight amid continued speculation the US Federal Reserve will announce more easing measures tomorrow night in the form of bond purchases. By contrast, the European Central Bank (ECB) is "in the process of phasing out" its non-standard policy measures and shouldn't keep interest rates "too low for too long" according to ECB council member Axel Weber. The 16-nation Euro zone currency opens higher today at 1.4022 after hitting a high overnight of 1.4057. Interest rates in the Euro zone are 1 per cent compared with 0.25 per cent in the US. The US central bank releases its policy statement tonight followed by the ECB and Bank of England on Thursday. Meanwhile, the Japanese Yen moved lower overnight against several of its major rivals including the greenback (80.65).

Data releases

AUD: Building approvals, Sep

NZD: No data today

JPY: markets closed

GBP: PMI Services, Oct

EUR: No data today

USD: FOMC Rate decision

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