Australian Dollar: After losing approximately 6.5% in value over the past fortnight the Australian dollar attempted to push higher yesterday, rallying from morning lows of 0.9680 to 0.9740 by late afternoon. Moving into Europe, the markets saw a burst of risk appetite off the back of better than expected German business conditions and a further gain of 40 points took the Aussie to daily highs of 0.9780. Ongoing disagreement between European Leaders on how to tackle their regions debt issues dampened any attempt at move higher as risky assets found themselves under pressure yet again. Opening this morning at 0.9720 investor sentiment is likely to remain suppressed into close of markets with a light economic calendar to finish the week.

We expect a range today of 0.9650 – 0.9760

New Zealand Dollar: The New Zealand Dollar took a breather yesterday after what has been a tumultuous week, settling itself in a in a range between 0.7390 and 0.7450. Starting the local session at the bottom end of this range some minor profit-taking and calming of the markets took the Kiwi through 74 cents to highs of 0.7435 by the afternoon. Moving offshore, another lift to 0.7450 was seen after German business conditions surprised to the upside however the move proved unsustainable and the New Zealand sank lower to open this morning back around 0.7410. With no major fundamentals due for release globally, we expect to see subdued trade into the weekend with Europe remaining the potential wildcard. Looking at the cross rates the Kiwi trades at 0.7628 against the Australian Dollar.

We expect a range today of 0.7360 – 0.7450

Great British Pound: The Great British Pound has declined to seven-week lows after Angela Merkel talked down the concept of a joint European bond, driving demand back to the relative safety of the Greenback. After rallying higher earlier in the session, Sterling fell from 1.5560 to 1.5485 with a drop in business investment adding pressure to the move lower. Opening this morning, short of any further developments from the Eurozone, we expect to see quiet trade into the close of markets with no major data releases expected. The Pound currently trades at 1.5490 against the Greenback, 1.5930 against the Aussie and 2.0885 verses the Kiwi.

We expect a range today of 1.5850 – 1.5990

Majors: With the Thanksgiving holiday keeping North America quiet focus was unsurprisingly back on Europe and a meeting between Germany's Angela Merkel, Frances Nicolas Sarkozy and Italy’s Mario Monti. In their first convergence since Monti took office earlier this month, the three leaders discussed Italy’s economic program and ways to deal with the escalating debt crisis in the region as a whole. The Euro fell approximately 50 points to 1.3325 after Merkel stated she still does not believe common European bonds are necessary and that they would send the wrong signal to the market. Earlier in the session, a relatively upbeat index of German Ifo Business Climate conditions pushed the shared currency to 1.3400 however Merkel’s words quickly cast doubt over the ability of European leaders to work together and agree a common plan to solve the debt crisis. Also helping the Euro back to near seven-week lows was another downgrade from ratings agency Fitch, this time for Portugal, where their sovereign bonds were cut to junk status BBB-; the Euro opening this morning at 1.3340 against the Greenback and the Yen sitting quietly around 77.1 after some recent gains were pared early yesterday.

Data releases:

AUD: No data due for release

NZD: No data due for release

JPY: Tokyo Core CPI y/y; National Core CPI y/y

GBP: No data due for release

EUR: German Import Prices m/m; Italian Retail Sales m/m

USD: Treasury Currency Report