Australian Dollar: A snap up of riskier assets yesterday morning saw the Aussie break comfortably through resistance at 1.0700 and reach session highs around 1.0750. However with both the Current Account balance and Private Sector Credit both failing to impress, investors began to speculate today’s GDP figures may be worse than expected. Paring earlier gains the Aussie fell back to test support at 1.0700 and investor concern has seen that level drop further during the European and North American sessions.

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Falling to a low of 1.0640, it seems short-term support at least has been established here and we open today a few points higher at 1.0670. In addition to the domestic growth figures due later this morning, another key event to watch is Chinese Manufacturing data scheduled to be released a half hour before. With the expansion of the Chinese economy one of the key areas of support for the Australian Dollar, this release could well be another source of volatility for today’s session.

We expect a range today of 1.0550 – 1.0700

New Zealand Dollar: It was a big day for the Kiwi yesterday, reaching new highs against the Greenback after local Business Confidence reported a significant increase to 38.3 from last month’s 14.2. After starting the session down near 0.8150 the Kiwi jumped over a cent, finding resistance at yet another high of 0.8260 and falling back to enter London hours around 0.8240. Although failing to reclaim these highs overnight the New Zealand Dollar did hold above support at 0.8620, even after a minor bout of risk aversion after US consumer confidence figures were revealed. Some uncertainty surrounding Australia’s GDP figures today has seen the Kiwi keep the Aussie in check; capitalising on its weakness and hitting highs around 0.7735. Opening today close to these highs at 0.7725, the Kiwi has slid slightly against the Greenback trading at 0.8230.

We expect a range today of 0.8180 – 0.8260

Great British Pound: Sterling rallied off the back of more Greek news and the resultant risk sentiment yesterday reaching highs of 1.6545 in what was a busy Asian session. Heading into its local hours Sterling suffered a corrective pullback and extended previous lows to find support in the 1.6420 zone. Dragging the Pound down was gains in the EUR/GBP cross rate after EU finance ministers said they would decide on a new Greek aid package by the end of the month. We open this morning with Cable consolidating around 1.6450, ahead of Manufacturing PMI and Net Lending figures both on the economic docket for today. After a move higher to 1.5500 the pound is relatively unchanged against the Aussie, falling back to open near 1.5420. Kiwi strength has resulted in support at 2.0000 giving way and we open slightly below at 1.9990.

We expect a range today of 1.5390 – 1.5520

Majors: It was risk-on trade early in the Asian session yesterday as safe-haven assets were sold off following a Wall Street Journal Article that revealed Germany is considering dropping its push for an early rescheduling of Greek bonds in order to facilitate a new package of aid loans. The Euro gained 50 points over the course of the session and broke through the 1.4400 handle for the first time in almost three weeks against the Greenback. With the Yen on the back foot following some disappointing local data and a statement from Moody’s confirming Japan has been placed on review for a possible downgrade, the EUR/JPY cross-rate jumped higher towards 117.00 and the Greenback pushed higher to 81.35. Heading offshore the Euro continued its gains as Jean-Claude Juncker, head of the euro-area finance ministers, said the EU leaders will decide on a new aid package for Greece by the end of the month. The shared currency hit a high of 1.4420 before a decrease in US Consumer confidence caused a minor sell-off in riskier currencies. The Euro opens today at 1.4395 and the Yen trades at 81.50.

Data releases

AUD: GDP q/q; Commodity Prices y/y

NZD: ANZ Commodity Prices m/m; Overseas Trade Index q/q

JPY: No data due for release

GBP: Manufacturing PMI; Net Lending to Individuals m/m; M4 Money Supply m/m

EUR: Final Manufacturing PMI

USD: ADP Non-Farm Employment Change; ISM Manufacturing PMI; Construction Spending m/m

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