Australian Dollar: The Australian dollar has sunk to 5 week lows as risk aversion grappled the markets on Thursday, extending its weekly loss to 5.3%. In a day where there was no other movement than to the downside, the local session saw a move from 1.0770 to 1.0650 and close to another 2 cents were erased over the course of the evening.

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Investors are nervous in light of recent events, namely the eleventh hour agreement of the Debt Ceiling bill, the shift of focus back to the Euro-Zone, the intervention of the BOJ and only last night the re-introduction of bond purchasing by the ECB and an unlimited credit facility offered to their banks.

All of this can only mean a frantic rush away from risky assets and the Australian Dollar has fallen to 1.0470 at the time of writing this morning. Looking ahead today the RBA will be releasing its monetary policy statement and this evening focus will shift to Non-Farm Payrolls from the US.

We expect a range today of 1.0350 – 1.0490

New Zealand Dollar: Investors flocked back to safety over the past 24 hours as key moves by both BOJ and the ECB have caused a degree of panic in the markets. As of the Asian open the New Zealand Dollar is trading at 3-week lows of 0.8320 and continues to looking heavy after already losing 5.8% in value just this week. Yesterday’s figures showed the country’s employment rate had not changed, and thus the last chance for the local economic docket to support the Kiwi passed without a ripple.

On the cross rates, the Kiwi is lower against the Aussie, however the high-yielding pair are struggling to establish a trend as the focus on both currencies at the moment is to sell. The New Zealand starts what looks to be a volatile day 0.8320 against the Greenback and 0.7960 against the Aussie.

We expect a range today of 0.8220 – 0.8350

Great British Pound: The Bank of England kept interest rates on hold last night for the 29th months straight and left its asset purchasing program unchanged at 200 billion pounds. In a month of continuing global uncertainty, the BOE have left open the option of more aggressive quantitative easing should the economic situation of the UK worsen.

Sterling moved little on the news; although it remained under pressure as a wide spread move back to the Greenback pushed it to lows of 1.6245.

With actions from the ECB spooking investors away from risky assets, the Pound is higher this morning on its antipodean cross rates. Against the Australian Dollar the Pound is buying $1.553 and against the New Zealand dollar it buys $1.95.

We expect a range today of 1.5500 – 1.5680

Majors: In the wake of the Debt Ceiling debacle investors have remained nervous, with attention focusing past the short-term to Europe’s on-going debt crisis along with grave concerns for the economic recovery of the US. An unexpected move by the European Central Bank overnight to re-launch its asset purchasing program and also offer banks unlimited liquidity at fixed rates for up to 6 months, caused wide spread panic.

The Euro has tumbled from yesterday’s high of 1.4350 to find support for the moment at 1.4100, where it opens today; and the Greenback has made considerable gains against most of its trading partners as investors flock back to safety.

The Greenback is also higher today against the Yen after the Bank of Japan intervened for the second time this year to somewhat calm the appreciation of their currency. With major exporters such as Toyota and Sony struggling, officials felt it was time to step in and sell the local unit and USD/JPY moved back through the 80.00 barrier for the first time in more than 3 weeks. Trading this morning at 79.10 investors turn their attention to this evening’s Non-Farm Payrolls; a leading indicator as to the health of the US economy.

Data releases

AUD: RBA Monetary Policy Statement; AIG Construction Index

NZD: No data due for release

JPY: BOJ Monthly Report

GBP: Halifax HPI m/m; PPI Input m/m

EUR: German Industrial Production m/m; Italian Prelim GDP q/q; Italian Prelim GDP q/q

USD: Non-Farm Employment Change; Unemployment Rate; Average Hourly Earnings m/m
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