Australian Dollar
The Australian Dollar dropped to lows of 1.0430 overnight as the US Dollar continues its surge on encouraging economic data. A lack of key releases on local turf this week is limiting the Aussie’s fire power, and a 5.0% decrease in consumer sentiment as reported by Westpac did very little to help. Adding to downside pressure was quarterly housing starts and following the previous 5.8% slide we saw a further decrease of 6.9%. Falling towards $1.05 in onshore hours pressure only mounted offshore and this morning we see the Aussie sitting lower at 1.0450.

We expect a range today of 1.0400 – 1.0490

New Zealand Dollar
The New Zealand Dollar has fallen against the Greenback over the past 24 hours as the Federal Open Market Committee portray an encouragingly upbeat view of the US economy following a string of positive fundamentals. Similar to the Aussie, an absence of key local data has given the Kiwi little else to focus on and thus we see the local unit slip around 1.9% from early highs yesterday around 0.8230. Falling to lows near 0.8070 early this morning, some consolidation of recent movements finds the NZD/USD trading at 0.8090. The Kiwi has also fallen against the Australian Dollar, paring recent gains to open this morning at 1.2910 (0.7746).

We expect a range today of 0.8040 – 0.8120

Great British Pound
Unemployment in the United Kingdom has risen during the three months till January, a 28,000 increase taking the overall figure to 2.67 million. The number of people claiming benefits also rose by 7,200 to a total of 1.61 million during the month of February. After peaking earlier at levels above 1.5730, Sterling tumbled upon the release through 1.5700 to find support at 1.5665. Opening here this morning the Pound is actually higher against the risk-sensitive Australian Dollar, trading at 1.4990 after briefly breaking through the psychological $1.5000 barrier. A similar story against the Kiwi the pair trade this morning at 1.9340.

We expect a range today of 1.4910 – 1.5050

Majors
Strength in the Greenback has continued overnight off the back of Federal Reserve chairman Ben Bernanke upgrading the central bank’s outlook for US economic growth. As policy officials begin to move away from a previously melancholic view, the increased optimism has sent the world’s reserve currency rallying; above 83.70 against the Japanese Yen and pushing the Euro below 1.3020. A 0.1% reduction in European core CPI and meagre 0.2% growth in industrial production was enough to keep the Euro suppressed, despite the American current account deficit widening to its highest level since 2008. Opening levels this morning see the Euro buying 130.3 US cents and the Yen trading at 83.75; event risk for today lies mainly in the North American session with the scheduled release of PPI (Producer Price Index), Unemployment Claims and the Philly Fed Manufacturing Index.

Data releases:

AUD: MI Inflation Expectations; New Motor Vehicle Sales m/m

NZD: Business NZ Manufacturing Index

JPY: No data due for release

GBP: No data due for release

EUR: Employment Change q/q; ECB Monthly Bulletin

USD: PPI m/m; Unemployment Claims; TIC Long-Term Purchases; Philly Fed Manufacturing Index