Australian Dollar:

The Australian Dollar opens significantly lower this morning buying 1.0505 US Cents. Driving the Aussie lower yesterday was the release of a Chinese Manufacturing Index which fell to its lowest level in 10 Months.

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Given Australia's strong trading ties with Asias largest economy, investors took the opportunity to sell the Australian Dollar, with the rate eventually bottoming out around the 1.0478 level against its US Counterpart. With Asian Stocks also losing considerable ground and a fresh bout of risk aversion hitting the market further selling pressures in the short-term are expected to remain on the higher-yielding currencies such as the Australian Dollar

We expect a range today of 1.0460-1.0560

New Zealand Dollar:

After the New Zealand dollar traded as high of 0.7998 late last week, we see the kiwi open this morning notably lower at a rate of 0.7900 against the Greenback. With a fresh bout of risk aversion being spurred on by concerns that the European Debt Crisis may yet worsen the New Zealand dollar was sold to an eventual low of 0.7858. Today we see the release of Inflationary Expectations with investors keen to gain a clearer timeframe to which the RBNZ may potentially look to raise interest rates. Meanwhile the Kiwi is also weaker this morning against the pound currently trading a rate of 0.49.

We expect a range today of 0.7850-7950

Great British Pound:

UK Stocks sank last night dragging the benchmark FTSE 100 Index to its lowest Level in two months. As global investors across the board shed riskier positions the Greenback was purchased and the Great British Pound sold. With a European Debt Crisis most likely set to worsen in the short term, there was no escape for the sterling as it was sold to an eventual low of 1.6087. This morning we see the Sterling open a full cent lower compared to the same time yesterday currently trading a rate of 1.6117 against its US counterpart. Attention should intensify on local happenings in the UK as we see the announcement of Public Net Borrowing figures due for release today

We expect a range today of 1.6080-1.6175

Majors:

In what proved to be an eventful day of trading yesterday Global Stocks sank the most in two months. As commodities plunged, Oil and metals also retreating there was a major move back into the Greenback overnight with the US currency strengthening against 16 of its major peers. Dominating the headlines, the market again heard rumours of growing concern that Europe's debt situation is worsening and that there path to economic recovery is slowing.

As the costs of protecting Greece against any debt default scenario continue to mount the EURO dipped overnight below 1.40 against the Greenback for the first time since March. This morning the EURO opens a full cent lower currently trading at a rate of 1.4042. Meanwhile the Yen opens higher this morning against all 16 most traded counterparts except the US at a rate of 81.981.

Data releases

AUD: No Data Today

NZD: Inflationary Expectations

JPY: No Data Today

GBP: CBI Realized, Public Sector Net Borrowing, Inflation Report Hearings

EUR: German Final GDPq/q, German IFO Business Climate

USD: New Home Sales

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