Australian Dollar:

Australia’s Central Bank cut the official cash rate yesterday from 4.5 to 4.25 percent for a second straight month. The cut marked the first consecutive drop since February 2009 with rates likely to normalise even further in early 2012. Following the announcement the Australian Dollar immediately lost half a cent, trading to a late afternoon low of 1.0155 against its US Counterpart. In overnight trade the Aussie Dollar did well to regain some its earlier losses, with global risk sentiment remaining relatively positive ahead of the EU Summit expected to commence later in the week. Looking ahead today with local GDP due for release at 11:30 am the National’s Currency opens at a similar level to those seen yesterday, currently trading at a rate of 1.0262

We expect a range today of 1.0180 – 1.0295

New Zealand Dollar:

The New Zealand Dollar experienced a mixed day of trading yesterday ranging between a 24 hour low of 0.7738 and high of 0.7816 against its US Counterpart. After drifting lower for the majority of the local session, the Kiwi rebounded overnight following the positive gains from global stocks and commodities. With the medium-term direction of the Kiwi likely to be dictated by the highly anticipated EU Summit commencing later in the week, the RBNZ is expected to keep the official cash rate unchanged at 2.5 percent tomorrow when they meet to discuss Monetary Policy Settings. Meanwhile this morning the Kiwi opens around 20 basis point higher, currently buying 78.12 US Cents.

We expect a range today of 0.7750 – 0.7865

Great British Pound

In a statement released overnight The Bank of England has introduced a new Sterling Liquidity Function Facility, designed to address the potential financial market strains, should the Debt Crisis in neighbouring Europe continue to worsen. With such Policy announcements effectively giving the Central Bank increased flexibility, in currency news the Sterling weakened against its US Counterpart yesterday trading to reach an eventual low of 1.5560. Despite the sell-off the Great British Pound did manage to re-gain some of its earlier loses opening around half a cent lower this morning at a rate of 1.5605. As has been the case in months past, the EU Summit due to commence later in the week, continues to hang over the market with any further advancement in the Sterling remaining unlikely unless some definitive solutions and underlying commitments are forthcoming out of Europe.

We expect a range today of 1.5110 – 1.5280

Majors:

Global Stocks recorded minimum gains overnight with investors eagerly awaiting the commencement of the EU Summit later this week. In a statement made yesterday US Treasury Secretary Timothy F. Giethner backed Germany’s and France push for further economic cooperation, urging the 17-Nation EURO to erect a stronger firewall to end the debt crisis. In what is shaping up as the most highly anticipated Summit of the year, further pressure has been placed on the need for clear austerity details to be announcement following the S&P Warnings of Credit Downgrades for several EURO Nations. Currency Markets have remained relatively subdued over the past 24 hours with the EURO trading between a low of 1.3332 to a high of 1.3427 against its US Counterpart. With the ECB also due to meet tomorrow, some definitive action will be required out of the EU Summit in order to see the EURO advance above the 1.35 Level. Meanwhile in the US Overnight the Dow Jones advanced 0.9 percent as the Greenback lost some slight ground against the Japanese Yen opening lower this morning at a rate of 77.705

Data releases

AUD: AID Construction Index, GDP q/q.

NZD: No Data Today

JPY: Leading Indicators

GBP: Manufacturing Production m/m, Industrial Production m/m, NIESR GDP Estimate

EUR: French Trade Balance, Italian and German Industrial Production m/m,

USD: Consumer Credit m/m