Australian Dollar: A move away from riskier assets yesterday meant that the Australian Dollar was unlikely to keep recent highs above 1.0500. A 0.7% drop in Construction Work for the month of July helped the Aussie on its downward path and by the handover to European hours it had found a bottom around 1.0450.

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A defiant push back above 1.0500 was met with a fight by the Greenback, as stronger fundamentals from the US and ongoing uncertainty in the lead up to this weekend’s meeting of the world’s central bankers pushed our local dollar back to intraday lows. Opening this morning just off these levels, we trade at 1.0465 ahead of a quiet day on the economic docket.

We expect a range today of 1.0380 – 1.0500

New Zealand Dollar: In a market very caught up with flows in and out of safe-havens, the New Zealand Dollar has been caught in the tide. This time the tide was going out and recent gains the Kiwi had made went with it. After starting yesterday perched up at 0.8360, it took a quick tumble and by lunchtime it was trading almost a full cent lower at 0.8270; not even an unexpected Trade Surplus was able to stop the move lower.

Although Greenback strength continued to prevail throughout the offshore sessions, support remained strong in the 0.8260/70 area and it opens this morning just off this at 0.8280. Later this morning Core Retail sales for NZ are due to be released and maybe the importance of this set of data may be able to bring a bit of domestic focus back for the Kiwi. Against its Aussie counterpart it opens very marginally lower at 0.7920.

We expect a range today of 0.8200 – 0.8310

Great British Pound: Many believed the Great British Pound shouldn’t get too comfortable above the 1.6500 level and for the short term anyway they have been proved right. In a day where Greenback strength prevailed it was knocked easily from its pedestal when US Durable Goods Orders relieved fears of a recession.

Tumbling from above 1.6520 it fell to an initial bottom of 1.6370 however has continued to trail lower to open today just above 1.6350. The next main focus for Sterling is Friday’s revised GDP figures for the second quarter of this year; however the figure is not expected to change. Looking at the cross rates the Pound has fallen slightly against the Australian Dollar to 1.5630 and 1.9750 against the New Zealand Dollar.

We expect a range today of 1.5550 – 1.5700

Majors: The Greenback has pared some of its recent losses overnight as bets continue to swing as to the content of Bernanke’s speech and US Durable Goods Orders came in considerably better than expected. This particular monthly release is a leading indicator towards the health of the manufacturing sector, and thus many people’s fears of a recession have been relieved. Also contributing to the ease is a rally back in the shares of Bank of America, and with banking jitters being eased, so did the pressure on the US Dollar.

The Euro however, has held up remarkably well in the face of further disappointing data, as both German and Belgium Business Climates came in with less than desirable figures. New Industrial Orders also posted a drop although for the most part the Euro managed to hold above 1.4400. We open this morning with the Euro trading at 1.4415 and the Japanese Yen at 76.95.

Data releases

AUD: No data due for release

NZD: Core Retail Sales q/q; FPI m/m

JPY: No data due for release

GBP: Nationwide Consumer Confidence; CBI Realized Sales

EUR: GfK German Consumer Climate

USD: Unemployment Claims; Natural Gas Storage