:: Australian Dollar: After holding onto recent gains above 0.9700 at yesterday's open, the Australian Dollar has let slip and made a move back towards support at 0.9650. Yesterday's public holiday in Australia resulted in a quiet Asian session and offshore trade has seen the AUD attempt to move back above 97cents, only to be pushed back by an unexpected increase in US Pending home sales. Markets are now trading cautiously ahead of today's Interest Rate announcement, with a 60% chance of a 25 point hike to 4.75% already priced in. Investors will be watching closely this morning as speculation has taken hold that last week's disapointing housing data may result in a more cautious monetary policy stance from the Reserve Bank. Other critical data due today is Retail sales and the Trade Balance, both due out this morning before the spotlight moves to the RBA. Entering today's onshore session trading around 0.9675 we are likely to see some volatile trade today, with support at 0.9650 and resistance at 0.9700 and then 0.9730.

- We expect a range today in the AUD/USD rate of 0.9600 to 0.9700

:: Great Britain Pound: The Pound has had a solid start to the week and after a quiet Asian session, entered Europe just below 1.5800. Bolstered by a better than expected Constructon PMI, it pushed back above 1.5800 against the USD and with the help of words from the UK Finance Minister George Osbourne we saw Cable test highs above 1.5860. Osbourne spoke out in support of the Governments actions, stating Britain has moved out of 'the financial danger zone' and is on the way to reducing the infamous record budget deficit. Cable has consolidated around 1.5830 at entrance to the Asian session will seek direction from Halifax's house Price Index and Services PMI due out early in Eurpoean trade, both key indicators in the country's economic health. Meanwhile the GBP/AUD cross opens at 1.6350 in what is expected to be a volatile session given the plethora of Australian data releases today.

- We expect a range today in the GBP/AUD rate of 1.6280 to 1.6400

:: New Zealand Dollar: The New Zealand Dollar has seen some choppy trade so far this week, but has remained quashed as risk aversion weighs on the commodity currency. Trading from an open of 0.7440 yesterday we saw a quiet local session with a gradual move downwards, but obvious intra-day support at 0.7422. Entering off-shore trade the Kiwi broke this support and fell below 74 cents briefly before recovering to bounce between 0.7400 and 0.7430 for the duration of North American trade. This morning's release of NZIER Business Confidence, where confidence has fallen from +18 in Q2 to +6 in Q3, has seen NZD/USD fall back below the 0.7400 handle and test earlier support at 0.9395. Recent gains against the AUD also look under threat as a result of this news as the Aussie pushes back towards 1.31 and currently trades at 1.3080.

- We expect a range today in the NZD/USD rate of 0.7350 to 0.7450

:: Majors: The Euro has given up some recent ground over the last 24 hours, slipping from opening highs above 1.38 on Monday to test key support at 1.3650/60 against the Greenback. The currency pair steadily retreated to find short-term support at 1.3750 however general risk aversion due to lingering concerns surrounding sovereign debt in southern Europe lent some support to the US Dollar and we saw the single currency fall back below 1.37. We are now seeing quiet trading between 1.3670/1.3695 ahead of European Retail Sales being released later this evening. The Yen started the week relatively unchanged however the release of Japanese Average Cash Earnings, which showed August's wage growth to be flat against expectations of a 0.8% increase, saw a move by USD/JPY back towards 84.00. The fall was capped around 83.85 and the Yen's losses were retraced as it is widely speculated the Bank of Japan will increase its aid to the economy. TheBoJ board meeting ends today with the announcement of the official cash rate, which is expected to be kept at 0.1% and the accompanying monetary policy statement. We currently trade at 83.40 with support at 83.20 and initial resistance around 83.60.

:: Data Releases:

  • AUD: Aug Retail Sales, Aug Trade Balance & Sep ANZ Job advertisements
  • NZD: No Data Expected Today
  • USD: Sep ISM Non-Manufacturing
  • GBP: Sep Halifax House Price Index, Sep Services PMI & Sep New Car Registrations
  • EUR: Aug Retail Sales & Sep PMI
  • JPY: BoJ Meeting