Australian Dollar: The Australian dollar has rallied an impressive 3.2% over the past 24hrs to highs above 1.0700 after a detailed plan to combat the European debt crisis finally emerged. As details started to emerge during Asian trading hours, improved risk sentiment saw the Aussie take an immediate yet modest gain from 1.0400 to 1.0470. As the session drew to a close and offshore trading commenced the Aussie and its risk-inherent counterparts continued to climb steadily, initial confidence in the Europe’s plan supporting the gains. With the local economic calendar holding little of interest the devil will be in the details, although so far so good for the Aussie as it looks comfortable at current levels around 1.0720.

We expect a range today of 1.0670 – 1.0770

New Zealand Dollar: With a European debt package agreement being reached on the same day as a hawkish RBNZ indicated domestic interest rates may need to rise in the future, it was of little surprise the Kiwi should rally the way it did. Gaining a remarkable 3.8% over the 24 hour period, the central bank meeting took the New Zealand dollar to the 80 cent handle before relief flooded the markets off the back of news from Europe; highs above 0.8220 were touched by the close of the North American session. Looking confident at these levels the Kiwi has also gained some ground against the Aussie, despite some volatile trade. The antipodean pair open this morning at 1.3030 (0.7675).

We expect a range today of 0.8160 – 0.8250

Great British Pound: The Great British Pound has broken back through $1.60 to reach 7-week highs against the Greenback whilst at the same time moving to 7-week lows against the Euro, all as a detailed plan to combat the Greek debt crisis finally emerges. The plan has dampened for the token safe-haven currency at the same time Bank of England Markets Director Paul Fisher said the U.K. economy may be shrinking. Currently Cable sits at 1.6100 as a result of flows out of the Greenback, however Sterling trades down at 0.8810 (1.1350) against the Euro, 1.5000 against the Aussie and 1.9560 against the Kiwi.

We expect a range today of 1.4920 – 1.5080

Majors: The Euro has made its biggest gain against the Greenback in over a year as European Leaders appear to have finally reached an agreement in how to resolve the European debt saga. Rallying more than 2.5% from daily lows of 1.3870, the Euro hit levels near 1.4230 before settling to open this morning at 1.4190. The finer points of the plan confirmed banks holding Greek bonds would accept a 50% write down in their value, a step that will assist greatly in reducing Greece’s debt to GDP ratio. They also agreed on a mechanism to expand the European Financial Stability Fund (EFSF) to approximately 1 trillion Euros (US$1.4 trillion), and alongside this banks must also raise more capital to protect themselves from the orderly Greek default and any future government defaults. The Japanese Yen has also touched highs against the US Dollar; reaching fresh record levels of 75.66 on speculation the Bank of Japan will not have enough power to curb the Yen’s strength. With the Greenback being sold on the cross rates the Yen still remains below 76 Yen to the dollar this morning at 75.97.

Data releases

AUD: No data due for release

NZD: No data due for release

JPY: Household Spending y/y; Prelim Industrial Production m/m; Tokyo Core CPI y/y; Unemployment Rate

GBP: GfK Consumer Confidence

EUR: French Consumer Spending m/m

USD: Core PCE Price Index m/m; Employment Cost Index q/q; Personal Spending m/m; Revised UoM Consumer Sentiment