Australian Dollar
The Australian dollar struggled to hold onto modest gains intraday yesterday after a survey showed inflation has fallen to its lowest level since 2009. Falling to a 24 hour low of 1.0212 against its US Counterpart the higher yielding asset has done well to consolidate the large gains across markets late last week given Manufacturing figures in the world’s largest economy fell well short of expectation overnight. Opening this morning around 30 basis points weaker at a rate of 1.0248 all eyes will be on the Reserve Bank of Australia at 2:30pm this afternoon where it’s widely expected they will keep the official cash rate unchanged at 3.5 percent, keeping in mind we have seen 125 basis points cut from the underlying rate over the past 8 months.

We expect a range today of 1.0190 – 1.0300

New Zealand Dollar
The New Zealand dollar has managed to hold on to recent gains against its US Counterpart in overnight trade, despite manufacturing readings throughout Europe and the United States showing an overall contraction. Highlighting the relative strength of many Australasian economies investors have maintained their faith in the higher yielding asset early this week with the Kiwi managing to find some short-term support above the psychologically important 80 US Cents level. Opening this morning at a rate of 0.8024 against its US Counterpart a non-manufacturing PMI reading out of China is likely to attract some attention with further developments out of Europe again likely to hold the key to global risk sentiment.

We expect a range today of 0.7980 – 0.8060

Great British Pound:
In an evening dictated by manufacturing readings around the globe, conditions in the UK manufacturing sector remained fragile in the month of June despite the overall PMI reading increasing to 48.6 up from May’s three-year low 45.9. With UK Stocks also advancing to their highest level in close to eight weeks, the Great British Pound failed to match such gains having traded between gains and losses over the past 24 hours. In moves not uncommon following such a large rally the Sterling opens this morning close to yesterdays open currently swapping hands a rate of 1.5686 against the Greenback. Meanwhile against the Aussie the Sterling opens stronger at 1.5304 whilst weaker against the Kiwi 1.9545.

We expect a range today of 1.5260 -1.5350

Majors:
The US Dollar strengthened overnight, whilst global equities swung between losses and gains after a report showed American Manufacturing unexpectedly shrank in the month of June. Adding to concerns recovering efforts in the world’s largest economy are starting to slow, the index reading of 49.7 showed a contraction for the first time in almost 3 years. In a busy session of economic releases the dust has continued to settle from the European Summit late last week as investors wait on the next move out the ECB where it remains a strong chance they will unveil further measures to contain the sovereign debt issues addressed at the Summit when they next meet this coming Thursday. Whilst in Europe a mixed bag of economic releases in the form of disappointing employment numbers however stronger than expected Final Manufacturing PMI have all pointed to a lower Euro. Trading between a 24 hour range of (1.2567 – 1.2677), a hint of Greenback strength also did little to help its cause as it opens weaker this morning at a rate of 1.2577.

Data releases

AUD:
Building Approvals m/m, RBA Cash Rate, RBA Rate Statement

NZD: ANZ Commodity Prices m/m

JPY:
Monetary Base y/y, Average Cash Earnings

GBP: Halifax HPI m/m, Construction PMI, Net Lending to Individuals m/m

EUR:
PPI m/m

USD:
Factory Order m/m