Australian Dollar:
Despite weaker than expected trade figures released out of China yesterday investors instead choose to focus on improved signs of growth in the world’s second largest economy as witnessed by the release of industrial production and retail sales data announced over the weekend, both beating forecast. Touching highs of 1.0504 against its US Counterpart overnight peaks in excess of 1.05 proved to be too much for the higher yielding asset which did come under some selling pressure following signs of political uncertainty in Europe. With recent ranges still not being broken data sources locally and abroad are at least providing some interest as investors continue to wait for a resolution from US lawmakers who are grappling with ongoing debt negotiations. Meanwhile the Aussie dollar opens at a very similar level to where we left it yesterday at 1.0485

We expect a range today of 1.0460 – 1.0510

New Zealand Dollar
The New Zealand dollar has been relatively muted over the course of the past 24 hours failing to break through its recent ranges of 0.8315 – 0.8355 against its US Counterpart. Whilst tier two data in the form of third quarter manufacturing sales had a minimal impact, better than expected data flows from China over the weekend did put a positive slant on the currency whose value is highly linked to underlying global risk flows. Looking ahead this week as well as ongoing US debt talks investors will keep a close eye on the Federal Reserve’s Policy statement due to be released tomorrow evening. Meanwhile this morning the Kiwi opens fractionally higher against the Greenback currently buying 83.35 US Cents.

We expect a range today of 0.8300 – 0.8360

Great British Pound:
Whilst Italian Prime Minister Mario Monti’s decision to quit government overnight was viewed as a clear negative by investors the performance of the Great British Pound has been anything but. Well supported by growing optimism that China’s growth is likely to continue on its recent path the advances of the Sterling were capped just short of the 1.6100 mark against its US Counterpart. Opening this morning 30 basis points stronger at a rate of 1.6068, short-term direction is likely to be largely dictated by data flows in broader Europe and the US given the quite domestic calendar. Meanwhile on the cross rates the Sterling is weaker against the Aussie (1.322) whilst unchanged against the Kiwi (1.9269).

We expect a range today of 1.5290 – 1.5350

Majors:
Global equity markets recorded some minor gains yesterday despite Italian Prime Minister Mario Monti announcing his intention to resign from government. In an attempt to calm fears that Italy would be headed for its own financial crisis given its lack of political stability the outgoing PM did say he remained confident that whatever government is elected that it will be a European-oriented one, watch this space. Trading in positive territory yesterday the Euro bounced nicely from earlier levels below 1.29 to open this morning stronger at a rate of 1.2936. In other happenings investors continued their recent struggles given the uncertainty surrounding fiscal cliff talks in the US as economic reports in China pointed towards improved levels of growth. In what is shaping up as an important couple of days the Federal Reserve’s Policy meeting set to commence on Wednesday will be closely watched given the large degree of influence further stimulus would have on the Greenback. This morning the US Currency opens weaker against the Japanese Yen at 82.36.

Data releases

AUD:
NAB Business Confidence

NZD: REINZ HPI m/m

JPY:
M2 Money Stock y/y

GBP: CB Leading Index m/m

EUR:
German ZEW economic sentiment, Eurogroup meetings

USD:
Trade Balance