Australian Dollar
The Australian dollar lost one third of a US Cent during the intraday session yesterday after Australia’s trade balance posted its third consecutive monthly deficit of $1.6bn. In the largest trade deficit since October 2009 the higher yielding asset was sold down to a late afternoon low 1.0170 against its US Counterpart. Ahead of the National Budget balance in which Treasure Wayne Sawn handed down his fifth budget, including a forecast surplus of 1.5 billion for the 2012/13 year the dollars overall reaction was relatively muted. As local investors left for the day the bearish trend continued throughout North American Trade with strong headwinds out of Europe continuing to plague the higher yielding currency. Having traded as low as 1.0088 over the past 24 hours the Australian dollar opens noticeably weaker this morning struggling to keep its head above water, currently trading at a rate of 1.0120

We expect a range today of 1.0050 – 1.0160

New Zealand Dollar
The story remained an all too familiar one overnight with renewed uncertainty in Europe once again imposing an ugly looking cloud over markets. Having spent the majority of the past 2 months above the 80 US Cents level the New Zealand dollar has been sold off consistently in the early parts of this week, trading as low as 0.7853 against its US Counterpart in overnight activity. With the overall bias still very much remaining towards the downside for New Zealand’s dollar, Greece’s struggle to form a government intensified overnight deepening concerns over an exit to the Euro-zone and the subsequent flow on effects for the rest of global markets. Opening this morning more than half a cent lower currently buying 78.82 US Cents overall direction is likely to again be dictated by risk-flows out of Europe ahead of any local happenings.

We expect a range today of 0.7820 – 0.7950

Great British Pound
It’s been a rollercoaster ride for the Great British Pound over the past 24 hours, doing well to curb some significant losses recorded early in the session. Having fallen more than half a US Cent, investors sold the Sterling to an overnight low of 1.6123 against its US Counterpart. Given voters clear rejection of austerity plans in both France and Greece the Sterling has again fallen victim to broader concerns surrounding the stability of its European neighbours. Recuperating some of its earlier losses the Great British Pound still opens lower against the Greenback this morning at a rate of 1.6158. On a related note, given the sell-off across riskier backed assets this week it’s no surprise to see the Sterling open noticeably stronger against both the Australian dollar (1.5962) and the New Zealand dollar (2.0494)

We expect a range today of 1.5900 – 1.6020

Majors:
US Stocks retreated and commodities fell as the Standard and Poor’s 500 Index fell to its lowest level in a month. With sentiment again being dominated by uncertainty in Europe the market has spent much of the past 24 hours mulling over the consequences of Greece’s inability to establish a workable coalition government, following the weekend elections. Whilst there appears no quick path to establishing a stable government pressure has again mounted on newly elected French President Francois Hollande to stand by France’s austerity commitments after ousting incumbent Nicholas Sarkozy. Having falling consistently over the early parts of this week the Euro remains under profound pressure losing further ground overnight. Reaching a 24 hour low of 1.2981 against its US Counterpart the shared currency opens this morning struggling to maintain levels above the 1.30 handle. In the days ahead very little in the form of economic fundamentals are due for release leaving market sentiment at the mercy of Political news flows out of Europe. Meanwhile this morning supporting a general move back into the Greenback the US Currency has been a major benefactor of investors more cautious outlook opening this morning in familiar territory against the Japanese Yen at a rate of 79.86.

Data releases

AUD:
No Data Today

NZD: RNBZ Financial Stability Report, REINZ HPI m/m

JPY:
Leading Indicators, Prelim Machine Tool Orders y/y

GBP: 30-y Bond Auction

EUR:
French Trade Balance

USD:
Wholesale Inventories m/m, FOMC Member Pianalto Speaks