Australian Dollar:
Pulling the Australian dollar back from a 2-week trough yesterday, the higher yielding asset appreciated against its US Counterpart as investors speculated that China’s government will announce stimulus measures designed to bolster the local economy. Sweeping to overnight highs of 1.0458, Spain’s pledge to cut its budget deficit was also a major factor which contributed to the shift in global sentiment towards riskier backed assets. Looking ahead over the coming days advances above the 1.05 level remain a stretch in the short-term given the expectation that the Reserve Bank of Australia will cut its underlying cash rate by 0.25 percent. Meanwhile this morning the Aussie opens stronger at 1.0441 against its US Counterpart

We expect a range today of 1.0400 – 1.0480

New Zealand Dollar
Direction of the New Zealand dollar has been pointed only one-way over the past 24 hours, up. Despite a report which showed New Zealand business confidence retreated this month rumours of further stimulus measures out of China sent Asian stocks souring, taking with it the New Zealand dollar. Reaching an overnight high of 0.8325 against its US Counterpart it’s hoped that China will soon take measures to propel growth essentially underpinning support for both local equities and more importantly commodity prices. Investors were also applauding overnight after Spain released its most recent budget, cutting spending and the deficit in an attempt to appease European officials. In what has been a positive 24 hour session the New Zealand dollar opens this morning stretching for higher ground as it currently buys 83.14 US Cents.

We expect a range today of 0.8270 – 0.8350

Great British Pound:
In figures released overnight Britain’s economy shrank by a less than estimated amount in the second quarter of this year as investors cling to the prospect of a recovery sooner rather than later. GDP fell by 0.4 percent instead of the forecasted drop of 0.5 whilst real household disposable income rose 1.9 percent, the biggest jump in three years. Driving the Great British Pound higher the Sterling reached an overnight top of 1.6242 against its US Counterpart well supported by budgetary cuts announced in Spain also. Meanwhile on the cross rate the Sterling opens noticeably weaker against both the Aussie (1.5542) and the Kiwi (1.9518).

We expect a range today of 1.5510 – 1.5580

Majors:
Dominating headlines and triggering a global rally Spanish Prime Minister Mariano Rajoy announced his nation’s fifth austerity package overnight. Highlighting the difficulties involved in finding the balance between voters who are demonstrating on the streets whilst also meeting the demands of his European Counterparties, overall investors have approved of spending cuts which equate to 4.5 percent of economic output. Triggering gains just short of half a cent against its US Counterpart the Euro opens stronger this morning at 1.2910. In what has been a busy 24 hour window economic releases out of the US were generally mixed given fewer Americans filed for unemployment insurance claims this was offset by figures which showed the US economy grew at 1.3 percent in the second quarter, slower than the expected pace of 1.7 percent. Adding to the pile, orders for US Durable goods also fell below forecast signalling a distinct slow down in business spending as fingers remain crossed that economic fundamentals will show signs of some improvement given the extensive stimulus already provided to markets by the US Federal Reserve.

Data releases

AUD:
Private Sector Credit m/m

NZD: Building Consents m/m

JPY:
Household spending y/y, Tokyo Core CPI y/y, Prelim Industrial Production m/m, Retail Sales y/y

GBP: Nationwide HPI m/m

EUR:
French Consumer Spending m/m, CPI Flash Estimate y/y

USD:
Personal Spending m/m, Chicago PMI, Revised UoM Consumer Sentiment