Australian Dollar: Traders took the Aussie higher in the lead-up to yesterday’s local building approvals data, rallying to a 1.0685 intraday peak. Whilst there was a 1 per cent rise in dwelling approvals for the month of July – the first increase in 3 months – the currency moved lower as it was weaker than the 2 per cent tipped by most economists.

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Buyers of the Aussie emerged around the 1.0660 area where it appears well supported for the time being as expectations of an interest rate cut have been revised down. In offshore trade, the Aussie moved to a high marginally above US107 cents but has since drifted back to open on Wednesday at 1.0675.

We expect a range today of 1.0620 – 1.0715

New Zealand Dollar: The kiwi, which opens at 0.8520 against the greenback today, moved steadily higher during yesterday’s Asian session buoyed by stronger than expected economic data. NZ housing approvals jumped by 6.3 per cent last month confirming a positive swing in the longer-term trend.

The currency hit fresh three-and-a-half week highs above US85 cents amid a continuation of the recent positive risk sentiment. Heading into the offshore session, the kiwi was trading at 0.8520 and moved to an eventual 24-hour high of 0.8550 – a level not seen since August 4 -before slipping back to this morning’s opening level. The kiwi is higher against the Aussie today 0.7975.

We expect a range today of 0.8475 – 0.8545

Great Britain Pound: Despite the greenback weakening against several major currencies overnight, pound sterling has stalled and opens today at 1.6297. Economic concerns continue to hamper any pound progress as a UK business confidence report released on Tuesday revealed a sharp drop to minus 3 in August (from +19 in July) – the lowest level since the depths of the recession in 2009.

In overnight trade, the pound moved between a high of 1.6418 down to a low of 1.6254. Meanwhile, the pound opens weaker today against both the Australian Dollar (1.5250) and the New Zealand Dollar (1.9100).

We expect a range today of 1.5220 – 1.5300

Majors: The Euro (1.4440) failed to hang onto its recent gains above 1.4500 on speculation the European Central Bank (ECB) has finished raising rates. The 17-nation currency is likely to remain capped ahead of next week’s ECB meeting where the impact on economic growth from the region’s debt crisis will be high on the agenda.

Meanwhile, the greenback weakened against several of its peers after US consumer confidence fell to a two-year low. The Conference Board’s August index slumped to 44.5 from 59.2 in July and is the weakest level since April. Notably, the survey was conducted during the recent turmoil on global equity markets. The US Dollar opens lower against the Japanese Yen today at 76.60.

Data releases

AUD: Private Sector credit, July

NZD: NBNZ Business confidence, August

JPY: Industrial Production, July

GBP: No data today

EUR: German and Euro Zone Unemployment, July

USD: ADP Employment change, August