Australian Dollar: The Australian Dollar traded a quiet 30-pip range throughout Asia on New Year’s Eve with an increase in Private Sector Credit providing only a short term-boost. A sharp rally in risk towards the close of the North American session managed to provide the fuel needed to break this range and the Aussie soared through resistance at 1.02 reached new highs yet again near 1.0250. Although opening the New Year slightly lower, levels above 1.02 were maintained initially, and choppy trade between 1.0170 and 1.0210 has ensued since. We currently trade at 1.0175 with our local Manufacturing Index and Commodity Price index to be released later today.

We expect a range today of 1.0090 – 1.0180

New Zealand Dollar: The New Zealand Dollar was also seen trading in a quiet range during onshore trade last Friday, only to break resistance and rally to highs around 0.7810 before the markets closed for the year. Opening 2011 lower along with other riskier assets, the Kiwi managed to push back to 0.7780 before succumbing to overall US Dollar strength and we open today at 0.7740 in the midst of a down-side correction. Against the Australian Dollar the Kiwi has bounced between 0.7595 and 0.7630 since entering offshore trade on New Year’s Eve and is currently sitting on the 0.76 handle.

We expect a range today of 0.7680 – 0.7760

Great British Pound: A less than desirable year for the Great British Pound managed to finish on a high note as a flock away from the safe-haven dollar and an unexpected increase in the Nationwide House Price Index saw it trade to a high above 1.5650. Strong US economic data has since supported the Greenback in the New Year, with an increase in Manufacturing levels and Construction spending pushing Cable back below 1.5600 to reach lows of 1.5430. With some movement away from commodity currencies the Pound has managed to push to highs of 1.5320 against the Aussie and back above 2 cents to 2.0100 against the Kiwi. Opening today we are at 1.5230 and 2.0020 respectively.

We expect a range today of 1.5150 – 1.5280

Majors: The markets finished out 2010 rather quietly last week with a risk rally towards the end of the North American session the only noteworthy event of the 24hr period. The EUR reached highs around 1.3420 just before the markets closed, with the Japanese Yen moving briefly below 81.00 against the Greenback. The big dollar open slightly firmer in the New Year however a strong open in equity markets and an increase in Manufacturing in both Europe and the US saw the Euro rally back towards 1.34 only to fall just short. Opening trade today we see the Euro at 1.3360 and the Japanese Yen at 81.65 with traders watching this evenings CPI figures from the Euro-zone and factory orders as well as FOMC minutes from the US.

Data releases

AUD: AIG Manufacturing Index; Commodity Prices y/y

NZD: No data due for release

JPY: No data due for release

GBP: Manufacturing PMI; Net Lending to Individuals m/m

EUR: German Unemployment Change; CPI Flash Estimate y/y

USD: FOMC Meeting Minutes; Factory Orders m/m

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