Australian Dollar
The Australian dollar firmed significantly against its US Counterpart yesterday after ratings agency Moody confirmed that it would keep Spain’s debt rating above junk bond status. Triggering a dramatic return to risk sentiment confidence surrounding Policy Makers ability to manage and contain Spain’s large debt level has continued to heighten leading into the all important European Summit set to commence this evening. Jumping to overnight highs of 1.0388 the Australian dollar has managed to consolidate those gains opening a full US cent stronger this morning at 1.0383. On the outlook today in what is shaping as a critical 24 hour period, Chinese growth figures due for release around midday remain a key risk event for the local unit with any reading above 7.5% annualised likely move the Aussie closer to resistance levels above 1.04.

We expect a range today of 1.0330 - 1.0430

New Zealand Dollar
The New Zealand dollar has enjoyed some serious upside momentum against the Greenback over the course of the past 24 hours heading in only one direction, north. Pushing throw highs above well worn resistance levels at the 82 US Cents mark the Kiwi ran out of steam at 0.8225 as we open this morning 80 basis points stronger at 0.8220. Having benefitted from Moody’s announcement that it would keep Spain’s debt rating at BAA3 (above junk status), better than expected housing figures out of the US as well as hopes of a Spanish bailout within weeks have all contributed to the general shift towards assets deemed riskier in nature. Meanwhile today volatilities are expected to heighten given the expected release of GDP, Industrial Production and Retail Sales figures from China

We expect a range today of 0.8180 – 0.8260

Great British Pound:
In minutes released from The Bank of England overnight Policy Makers voted unanimously to keep the bond-purchase target at 375 billion pounds whilst the minutes also showed leaders remained split on whether further stimulus would be needed next month. Whist hints of further stimulus are likely to weaken the Pound in the short-term the Sterling was picked up by investors last night after UK’s unemployment rate unexpectedly fell from 8.1 percent to 7.9 in September. Opening this morning stronger against a broadly weaker Greenback at 1.6146 the Sterling was unable to keep pace with both the Australian Dollar (1.5546) and New Zealand Dollar (1.9637) which both open weaker.

We expect a range today of 1.5510 – 1.5590

Majors:
The US dollar is once again broadly weaker this morning as investors continue to add risk to an already risk-heavy portfolio. Spurred on by US housing data which many have labelled “amazing” figures released showed new-home construction surged in September to its highest level in four years, jumping a staggering 15 percent. Whilst building permits also beat forecasts the strong reads were well and truly enough to offset some disappointing corporate earning results on Wall Street.

Meanwhile across to Europe and the good news continued as the shared unit rallied to its highest level in over a month. Finding itself in strong demand the Euro traded as high 1.3138 against its US Counterpart as it opens pushing fresh ground on the upside at 1.3120. Acting as a catalyst for the move higher Moody’s rating agency reaffirmed Spain’s credit rating stating the nation was now in a much better place given the improved access it has to credit lines, specifically those on offer by the ECB. Looking ahead today given so much attention has already been focused towards the 2-day European Summit set to commence this evening high on the agenda will be the potential timing of Spanish bailout, conditions of austerity in Greece as well increased monetary union throughout the region

Data releases

AUD:
NAB Quarterly Business Confidence

NZD: No Data Today

JPY:
No Data Today

GBP: Retail Sales m/m

EUR:
Spanish 10-y Bond Auction

USD:
Unemployment Claims, Philly Fed Manufacturing Index