Australian Dollar: The Aussie opens lower today against the greenback at 0.9850. As expected, the Reserve Bank of Australia kept the cash rate on hold yesterday at 4.75 per cent and the impact on the currency was minimal. In light of recent weaker-than-expected growth and retail sales data, Governor Glenn Stevens’ accompanying statement noted that “lending rates in the economy are now a little above average”. The Aussie was largely directionless throughout most of yesterday’s local session moving about 20 pips either side of the US99-cent mark. In offshore trade, the unit tracked moves in the Euro and we hit a high above 0.9950 however the gains were short-lived as the Euro tracked lower amid ongoing concerns as to how to contain the region’s debt crisis from spreading to other nations.

We expect a range today of 0.9800 – 0.9920

New Zealand Dollar: The New Zealand Dollar opens marginally lower against its US counterpart on Wednesday at 0.7585. The unit endured another tight range (0.7585 – 0.7615) during the local session as the market awaits tomorrow’s interest rate decision by the Reserve Bank of New Zealand. Rates are widely tipped to remain on hold at 3 per cent. The kiwi could not even get a boost from better-than-expected retail card transactions data which climbed 5.5 per cent in November. The currency has not fared any better against its trans-Tasman rival and hit a one-month low of 0.7670 yesterday. The NZD/AUD cross rate opens today at 0.7695.

We expect a range today of 0.7540 – 0.7610


Great British Pound: Pound Sterling (1.5765) moved higher overnight on the back of stronger-than-expected economic data. A survey by the British Retail Consortium revealed that sales climbed 0.7 per cent in November whilst manufacturing grew at 0.6 per cent annual pace in October - twice the estimate of most economists. The data helped take the pound to an overnight high of 1.5821 during a time of continuing uncertainty and risk aversion on currency markets amid Europe’s sovereign debt crisis. Meanwhile, the pound is stronger against both the Australian Dollar (1.5990) and the New Zealand Dollar (2.0770).

We expect a range today of 1.5950 – 1.6060

Majors: The Euro has failed to hang onto its gains above 1.3400 as Ireland’s parliament vote on austerity measures that are required in order to qualify for an 85 billion Euro aid package. As well as strong technical resistance around the 1.3470 area, concerns remain on currency markets about how to contain the region’s debt crisis from spreading to other nations. Earlier in the session, the 16-nation currency gained on the greenback after European finance ministers ruled out immediate aid for Portugal and Spain. Meanwhile, the greenback opens higher against the Japanese Yen today at 83.45.

Data releases

AUD: Investment Lending, Oct

NZD: Manufacturing activity volume, Q3

JPY: Machine Orders, Oct

GBP: No data today

EUR: German Industrial Production, Oct

USD: No data today

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