Australian Dollar:

The Aussie was sold off early in the Asian session to an intraday low of 1.0405 in the lead-up to the release of the Reserve Bank August minutes. The central bank decided to pause on interest rates on concerns that international turmoil on financial markets would dampen global growth and impact domestic demand. There was buying interest at these levels and the unit rallied once again towards US105 cents.

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During the offshore session, the Aussie moved to a high of 1.0512. Near-term direction in the Aussie is largely sentiment-driven as European Sovereign Debt Concerns continue to hang over markets. This morning we see the Australian Dollar open slightly lower against its US Counterpart at a rate of 1.0469 with the local economic calendar remaining relatively quiet for the remainder of the week

We expect a range today of 1.0420 -1.0530

New Zealand Dollar:

The New Zealand Dollar appears to have consolidated somewhat and despite the havoc that occurred last week on global stock markets appears in a good position to push higher as risk appetite slowly and cautiously returns to the markets. During the Asian session the Kiwi moved in a 1 cents range (0.8372 to 0.8350) as punters pursued high yielding assets to compensate for the losses they took last week.

In New Zealand today we see the release of both the Input and Output component of PPI, with both releases expected to be well down on previous. Versus the Australian Dollar, the New Zealand opens relatively unchanged and is currently changing hands at 0.7970.

We expect a range today of 0.8310 - 0.8410

Great British Pound:

The Great British Pound Advanced yesterday as an inflationary report released showed prices accelerated at a faster than expected pace. With Consumer Price Inflation figures growing at a rate of 4.4 percent in July against an expected rise of 4.3 percent the Sterling rallied to overnight high of 1.6476 against its US Counterpart advancing against 13 of its 16 major counterparties.

Despite the Pounds recent advance its unlikely the BOE will look to raise interest rates in the foreseeable future given the economic struggles of its European neighbours and the lack of confidence and growth currently present throughout Global Markets. Meanwhile this morning the Great British Pound opens a full cent higher against the Australian Dollar at a rate of 1.5702 as the market looks towards the release of the Official Employment Data expected for release early this evening.

We expect a range today of 1.5660 – 1.5790

Majors:

The S&P 500 Index dropped 0.6 percent yesterday as the EURO slid from a three-week high against the US Dollar. Losses in equities markets overnight were driven by a report showing economic growth for the 17- Nation EURO rose by a mediocre 0.2 percent from the first quarter, the worst performance since the broader EURO Region emerged from recession late 2009. With German GDP Figures also coming in well below expectation the EURO was sold to reach an eventual low of 1.4353 against its US Counterpart as it opens lower this morning at a rate of 1.4400.

Whilst poor economic numbers out of Europe continue to hang over markets the news out of the US overnight was relatively mixed and despite housing starts falling last month Industrial Production figures for the month of July came in well above expectation climbing 0.9 percent. With daily ranges tightening significantly over the first half of the week the Greenback opens flat this morning against the Japanese Yen at a rate of 76.791.

Data releases

AUD: MI Leading Index m/m, Wage Priced Index