Australian Dollar: The Australian dollar slumped against the Greenback for the third consecutive day as economic effects of flooding in North Queensland start to come into question. RBA board member Donald McGauchie expressed the floods are likely to interrupt exports and thus have a significant impact on the nation’s economy. Along with the US economy going from strength to strength, the Aussie’s woes have been two-fold and we saw the first dip below parity in over a week touching as low as 0.9960. A slight retracement sees the market open today right on parity with initial support around 0.9970. The economic calendar offers both the AIG Services Index and Building Approvals later this morning.

We expect a range today of 0.9940 – 1.0010

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New Zealand Dollar: The Greenback is letting little stand in its way at the moment and the New Zealand Dollar is no exception. Falling from opening highs near 0.7680, yesterday’s onshore session saw support for the Kiwi establish itself at 0.7625, with offshore trade breaking this support to fall below 76 cents. It is the opinion of some that the Kiwi is oversold against the US Dollar and with little on the horizon to provide support it appears we may be witnessing a corrective movement. The New Zealand Dollar has also fallen below 76 cents against the Aussie and after opening yesterday at 0.7630 we now see trade testing support at 0.7590.

We expect a range today of 0.7530 – 0.7620

Great British Pound: Yesterday’s gains against the Dollar have been quashed as impressive employment and services data from the States dominated trade overnight. After falling back to 1.5550 during the Asian session, Sterling’s brief rally back above 1.5600 was dampened by an unexpected contraction in local PMI Construction and then saturated by the impressive U.S. figures. Falling as low as 1.5460, the Pound has battled back above 1.5500 to open today at 1.5510. With the Aussie and the Kiwi displaying weaknesses of their own, the cross rates have been rather unimpressive to watch and start today at 1.5500 and 2.0390.

We expect a range today of 1.5440 – 1.5550

Majors: The US dollar has continued to rally, gaining further momentum after data from the labour and services sectors came in above market expectations. The Dollar made its biggest gain against the Japanese Yen as reports showed U.S. companies almost tripled the forecasted increase in jobs, and the services industry grew at its fastest pace since May 2006. The Euro was also suffering with local quandaries, this time the Swiss National Bank declared it would not accept bonds from some Irish banks as collateral. The dollar climbed to 83.36 against the Yen and the Euro fell as low as 1.3125 with investors now directing their attention to the much anticipated monthly Non-Farm Payrolls due out this Friday.

AIG Services Index; Building Approvals m/m

NZD: No data due for release

JPY: No data due for release

GBP: Services PMI; BOE Credit Conditions Survey

EUR: Retail Sales m/m; German Factory Orders m/m

USD: Unemployment Claims


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