Australian Dollar
The Aussie has drifted sideways for most of the last several days in holiday-thinned trade. Regardless, the currency has bumped into resistance around the US102 cent area and only a concerted move back into risk would take the Aussie above this level. The unit opens at 1.0150 on Wednesday after Asian equity markets moved lower on Tuesday as the Bank of Japan said risks to the economy have increased. Also keeping a lid on the local unit are lower commodity prices and nervousness ahead of an Italian bond auction later this week.

We expect a range today of 1.0120 to 1.0170

New Zealand Dollar
The kiwi has moved largely sideways during holiday-thinned trade. Asian markets returned yesterday only to see stocks in the region move lower after The Bank of Japan said risks to the economy have increased. As base metals such as copper and gold also drifted lower, so too did the kiwi which opens on Wednesday at 0.7710. The currency has traded in a fairly tight band over the last 24-48 hours between a low of 0.7720 and a high of 0.7755. Meanwhile, against the Aussie, the kiwi is changing hands at 0.7590.

We expect a range today of 0.7690 to 0.7725

Great Britain Pound
Sterling has drifted lower over the last few days and opens on Wednesday at 1.5650 against its US counterpart. Similar to other currencies linked to risk and global growth, headwinds are likely to remain for the pound while the prospect of a 2012 recession in Europe looms over the market. Over the last few trading sessions, Sterling has struggled around the 1.5700 area. Holiday-thinned trade is only likely to present further risks to the downside. Meanwhile, the pound opens steady against both the Australian Dollar (1.5400) and the New Zealand Dollar (2.0306).

We expect a range today of 1.5380 to 1.5430

Majors
The Euro (1.3070) remains under pressure against the greenback and is hanging onto the key support level of 1.3000 ahead of an Italian bond auction. In a test of market nerves, Italy will tomorrow sell 9 billion Euros of 179-day bills and as much as 2.5 billion Euros in zero-coupon 2013 bonds. Ten year Italian bond yields have recently nudged 7 per cent - the level that spurred Greece and Portugal to seek bailouts. As manufacturing, consumer and employment data continues to show signs of improvement across the Atlantic in the US, headwinds are likely to remain for the 17-nation currency. Meanwhile, the greenback opens lower against the Japanese Yen at 77.80.

Data Releases

AUD: No data today

NZD: No data today

JPY: Industrial Production, Nov

GBP: No data today

EUR: No data today

USD: No data today