Australian Dollar: The Aussie continues to be on the back foot against the Greenback as a raft of positive releases Stateside indicated that the US economy is heading in the right direction and the that F.O.M.C. will continue with QE2 over the next several months. The Australian Dollar traded between 0.9903 and 0.9990 during the offshore sessions as the effects to local growth from the impact of the flooding in Queensland continues weigh on the minds of the market. Retail Sales is due out this morning we many expecting the figure to come in positive and well above the previous reading of -1.1%.

We expect a range today of 0.9890 to 0.9990

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New Zealand Dollar: The New Zealand Dollar mirrored the Australian Dollars movements Friday as US positive data came out Stateside and again triggered a wave of Greenback buying. In offshore trade the Kiwi traded to a low of 0.7553 and a high of 0.7638, and is currently trading at 0.7581 in anticipation of the Trade Balance scheduled for release this morning. It is expected that high yielders will again come under pressure this week as the US economy gathers pace and the market continues to be long the US Dollar.

We expect a range today of 0.7500 to 0.7600

Great British Pound: The Sterling gained against the Greenback on Friday as market participants brought forward their expectations that the Bank of England would potentially start hiking interest rates in the UK as early as third quarter this year. The Pound rallied to an intraday high of 1.5572 on the expectations before giving back some of the gains to trade just above 1.5520 close of business Friday. Sterling is currently changing hands at 1.5600 against the Australian Dollar and 2.0440 against the New Zealand dollar.

We expect a range today of 1.5450 to 1.5650

Majors: A positive reading in the US Unemployment rate and Non Farm Employment continued the “buy North America” theme as the market continues to believe that the US economy is tracking in the right direction. Although fewer jobs were created in December (actual 103,000; forecast 159,000), it was the Unemployment Rate that dropped to its lowest reading since May 2009 to come in at 9.4% compared with a forecast of 9.7% that sparked the market to buy the big dollar. Against the EURO, the US Dollar broke through the physiological barrier of 1.30, touching a low of 1.2864, with a mixed bag of European data largely being overlooked by the market in favour of the US positive releases. The US Dollar is down against the Pound and Japanese Yen and is currently changing hands at 1.5515 and 83.21 respectively.

Data releases

AUD: Retail Sales; ANZ Job Advertisements

NZD: Trade Balance

JPY: Bank Holiday

GBP: Halifax HPI m/m

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