Australian Dollar
Recent shedding of the Aussie continued yesterday and by early afternoon in Asia the local unit was looking heavy just above 1.0500, despite NAB’s survey showing business confidence improved slightly throughout the month of July. Nevertheless, the Australian dollar attempted to hold off its sellers and rallied to 1.0540 before it eventually succumbed during the overnight session; a strong US retail sales report helping the Greenback strengthen to 1.0480 against our dollar. Not far above here this morning local data is still light, with Westpac consumer confidence the main ticket item ahead of a selection of US data releases this evening.

We expect a range today of 1.0440 – 1.0540

New Zealand Dollar
The New Zealand dollar opens lower this morning despite receiving an earlier boost from local retail sales figures, which recorded a 1.3% increase from the month prior and pushed the currency to 0.8110 against the Greenback. At the end of the day, the figures were not strong enough to protect against later US Dollar strength as a result of their own retail sales and the NZD/USD fell to levels below 0.8050. Opening here this morning, the local economic calendar is light and direction today will likely be derived from further US fundamentals, including CPI this evening. Overall the New Zealand dollar was also outperformed against the Aussie and the cross-rate trades at 1.3020 (0.7680) this morning.

We expect a range today of 0.8000 – 0.8090

Great British Pound
Sterling opens this morning within 10 pips of yesterday’s open, as an earlier rally above 1.5700 was spoilt by a strengthening Greenback later in the day. Local CPI came in higher at 2.6%, although still within the BOE’s target range, however market participants are treading cautiously ahead of the central bank’s MPC meeting minutes due later today along with key unemployment figures for July. This morning Cable trades slightly lower at 1.5675, although a relatively larger fall in the Aussie and the Kiwi left the Pound with an advantage on these crosses, GBP/AUD trading at 1.4945 and GBP/NZD at 1.9460.

We expect a range today of 1.4880 – 1.5020

Majors
The Greenback has rallied to four-week highs against the Japanese Yen after US retail sales posted their first monthly increase since April and producer prices also registered a modest increase. Pushing to 78.90 initially, the safe-haven pair settled back around 78.70 resulting in a daily gain of 0.5% although the quashing effect these numbers will have on QE3 rumours limited gains in other pairs. The Euro fell from earlier highs of 1.2380, partly because of Greenback strength but also a result of decreasing economic sentiment in Germany and an expected contraction in gross domestic product for the euro-zone as a whole. Opening this morning at 1.2320, the euro remains susceptible to the downside and should 1.2300 be breached the next level to watch is 1.2240. US CPI figures are out tonight which may create some volatility in an overnight session where French and Italian banks are closed for Assumption Day.

Data releases:

AUD: Westpac Consumer Sentiment; Wage Price Index q/q

NZD: No data due for release

JPY: No data due for release

GBP: Claimant Count Change; MPC Meeting Minutes; Unemployment Rate

EUR: No data due for release

USD: Core CPI; Empire State Manufacturing Index; Industrial Production; TIC Long-Term Purchases