Australian Dollar:

The Australian Dollar traded lower for much of yesterday with the local share market losing 2.3 percent. Driving equities lower the markets digested news that North Korean Dictator Kim Jong II had died, sparking concerns that a new leadership transition could be a rocky.

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Doing little to support domestic demand for the dollar, one of the Nation’s largest retailers issued a shock profit downgrade. After trading between a 24 hour range of (0.9900 – 0.9986) against its US Counterpart the Australian Dollar appears set for some further downside risk today with the RBA due to release minutes from its December meeting in which the Central Bank cut the official benchmark rate to 4.25 Percent from 4.5 Percent. Meanwhile this morning the Australian Dollar opens lower against the Greenback currently buying 99.18 US Cents

We expect a range today of 0.9825 – 0.9960

New Zealand Dollar
The New Zealand Dollar has remained range bound for much of past 24 hours trading between a low of 0.7564 to an eventual high of 0.7639 against its US Counterpart. In a relatively flat session the Kiwi remained unfazed by comments made by ECB President Mario Draghi that the Central Bank is restricted in its ability to increase government-bond purchases to fight the regions debt crisis due to current treaty agreements.

Looking ahead for the rest of the week the local Economic Calender is likely to take centre-stage with Current Account Figures due for release tomorrow followed by the all important economic growth reading on Thursday. Opening this morning at a rate of 75.72 against its US Counterpart any sustained advancement above the 76 US Cents level appears unlikely unless domestic fundamentals surprise on the upside.

We expect a range today of 0.7510 – 0.7630

Great British Pound
Following a relatively uneventful day of trading the Great British Pound opens slightly lower this morning at a rate of 1.5520 against its US Counterpart. With market conditions having calmed somewhat in the early parts of this week, in Rightmove HPI monthly figures released overnight UK House Prices plunged 2.7 percent in December.

Coupled with rising unemployment Rightmove Plc did go further to say that the UK Property Market is likely to face some tough challenges in 2012. Having remained relatively subdued against the Greenback there were some signs of life for the Sterling against both the Aussie and the Kiwi yesterday opening stronger this morning at a rate of (1.5646) and (2.0484) respectively

We expect a range today of 1.5570 – 1.5710

Majors
As has been the overriding theme throughout currency markets of late, the EURO fell overnight to reach an eventual low of 1.2982 against its US Counterpart, moving closer to its January low of 1.2872. Meanwhile this morning the EURO opens around 30 basis points lower at a rate of 1.3016, with trading ranges having tightened significantly in the early part of this week.

Driving US Stocks lower and US Treasuries higher overnight were comments made by ECB President Mario Draghi that substantial risks to the economy remain as the Central Bank made clear, it is unable to step-up government bond purchases. Draghi went further to say that further purchases are unlawful under its founding piece of legislation as the Central Bank seeks to retain credibility and independence. With Riskier Assets again taking a backward step the US Currency advanced overnight appreciating against the Japanese Yen to open stronger this morning at a rate of 77.940

Data releases

AUD: CB Leading Index m/m, Monetary Policy Minutes

NZD: No Data Today

JPY: All Industry Activity m/m

GBP: GfK Consumer Confidence, Nationwide Consumer Confidence, CBI Realized Sales

EUR: German PPI m/m, GfK Consumer Confidence, German Ifo Business Climate

USD: Building Permits, Housing Starts