Australian Dollar: The Australian Dollar rallied offshore to a monthly high as global equities and commodities soared after China refrained from raising interest rates. Stocks in the US and Europe traded at fresh 2year highs as economic indicators showed the Chinese economy is withstanding the PBOC tightening policies boosting optimism for the future growth of the global economy. The positive turn in investor risk appetite drove the Aussie higher, gaining 1% on the US Dollar, to test 0.9980. Ahead of today’s NAB business confidence report the Aussie opens just off its highs at 0.9963 against the US Dollar.

We expect a range today of 0.9900-0.9980

New Zealand Dollar: Industrial and precious metals climbed, with gold heading for its 10th annual gain while commodities gained as risk appetite improved. Strong figures from China boosted confidence the world’s second largest economy will continue to fuel global expansion. Higher yielding currencies benefitted from the risk rally overnight as investor’s rejoiced in China’s move to hold interest rates. The Kiwi gained 1.1 US cents throughout the trading day, finding a ceiling at 0.7575 US Dollars. On tap today are retail sales figures for New Zealand which started the day buying 0.7557 US Dollars.

We expect a range today of 0.7510-7570

Great British Pound: The Pound barely moved in Asia, trading between 1.5775-1.5800 against the Greenback. Moving offshore the Sterling re-animated, dropping to 1.5720 US Dollars following reports production costs had increased for the 3rd month. Input prices rose 0.9% last month outstripping market estimates of a 0.7% increase from October. Increases in raw material cost were attributed to higher prices for oil, energy and imports brought on by strong inflation. Gains in equities late in the session saw the Cable approach 1.5900 without success. Meanwhile the Pound opens lower at 1.5925 versus the Aussie and 2.0994 against the Kiwi.

We expect a range today of 1.5850-1.5960

Majors: Overnight European stocks climbed for the 6th day, extending 2yr highs, as risk rallied after China refrained from tightening interest rates. The Euro breached 1.3400 against the US Dollar reaching a 3 week high of 1.3530. Meanwhile the US Dollar weakened against Yen falling to 83.10 Japanese Yen as investors sought riskier assets ahead of the Federal Reserve’s final meeting for year. The Nikkei 225 Stock Average rose to its highest close since May, as U.S. consumer confidence boosted the outlook for the global economic recovery and China refrained from raising interest rates.

Data releases

AUD: Housing Starts, NAB Business Confidence

NZD: Retail Sales

JPY: Revised Industrial Production

GBP: CPI NOV

EUR: German ZEW Economic Sentiment

USD: Retail Sales, Production Prices

Newsletter: Subscribe to receive this report daily