Australian Dollar: The Aussie has failed to recapture much of its recent losses and opens on Friday at 0.9925 against its US counterpart. Negative sentiment regarding the Euro zone and fears of further bank and sovereign downgrades pushed local equities lower and the Aussie was caught in the maelstrom hitting an intraday low of 0.9880. With domestic interest rates likely to keep falling in the first half of 2012 as the ongoing turmoil in Europe drags on the global economy, the currency is coming under pressure. During the offshore session, the unit moved briefly to a two-and-a-half week low of 0.9860. Meanwhile, the Aussie opens largely unchanged against the Euro at 0.7630.

We expect a range today of 0.9880 to 0.9990

New Zealand Dollar: Like it’s trans-Tasman neighbour, the kiwi sell-off continued yesterday as the market view of Europe is that last week’s EU Summit has failed to deliver any worthwhile actions. During the Asian session the Kiwi traded against the US Dollar between 0.7472 to 0.7516 as rumours emerged of potential downgrades of not only the 17 nations that use the Euro as their local currency but their banks as well that have debt linked to the sovereign crisis. With the markets sole attention of late being on the European Debt crisis and the road map of fiscal union, volatility is expected to remain high for several weeks. At time of writing the NZD is changing hands marginally higher than this time yesterday at 0.7530 versus the greenback.

We expect a range today of 0.7490 to 0.7560

Great Britain Pound: With rumours circulating the markets of further downgrades to not only European countries but banks by the 3 major rating agencies, GBPUSD traded sideways for the majority of the Asian session as market participants continue to prepare for the potential end of the EURO and the consequences to global growth. Over the last several days the Pound Sterling has been trapped within a 2 cents range (1.54 – 1.56) and last night was no exception as developments out of Europe continue to be the major focus of the market. During the offshore session the release of UK Retails Sales for the month of November saw a fallwith the figure coming in at -0.7% compared with last month reading of -0.3%. Against the Australian and New Zealand Dollar, the Pound is currently trading at 1.5600 and 2.0550 respectively.

We expect a range today of 1.5570 to 1.5650

Majors: Whilst European debt fears continue to drive overall sentiment, the greenback fell against a range of currencies overnight as US economic data came in better than expected, sapping demand for the greenback as a safe haven. Jobless claims in the US dropped to a three-year low with applications for unemployment benefits dropping by 19,000 to 366,000 in the week ending December 10. The 17-nation euro moved off an eleven-month low of 1.2956 hitting an overnight high of 1.3049 against the US Dollar after Spain sold more than its maximum target at a debt auction which provided some much-needed support. Meanwhile, the greenback opens lower against the Japanese Yen today at 77.80.

Data releases

AUD: No data today

NZD: No data today

JPY: No data today

GBP: No data today

EUR: Italian current account, Oct

USD: CPI, Nov