Australian Dollar: The Australian dollar opens this morning at a rate of 1.0694 after advancing to a record high of 1.0718 against its US counterpart overnight. With Stocks rebounding and healthy local terms of trade figures being released yesterday, investors snapped up the Aussie Dollar in the local session with upper resistance around 1.06 being tested late in the afternoon.

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With global stocks staging their biggest rally of 2011 and gold firming above the 1500 US an ounce mark there was an influx of demand for assets linked to growth. As signs of global growth improvements swept the headlines, the "risk on" mode reached full flight in the offshore session as all assets deemed slightly riskier were bought. Today we see the ABS release its Producer Price Index for the March quarter with such results providing a little glimpse towards CPI which is due for release for next Wednesday.

We expect a range today of 1.0620 to 1.0720

New Zealand Dollar: After some nervous moments early in the week, the New Zealand Dollar momentarily cracked the 0.80 mark against the Greenback last night. Leading up to the overnight rally above the 0.80 level the Kiwi progressed well throughout the day, supported by the presence of increasing sentiment towards higher-yielding currencies.

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With US Reporting season in full swing the Dow Jones Industrial Average reached an almost three year high amid better than expected company results spurring renewed confidence in global growth prospects. As risk has become a major theme in the markets of late, the Greenback continued its slide, further propping up the local unit. In the absence of any substantial economic happenings today the majority of direction is likely to come from offshore. This morning the New Zealand Dollar opens at a rate of 0.7966 against the US, and 1.3420 against the Aussie.

We expect a range today of 0.7900 to 0.8000

Great British Pound: The release overnight of the Monetary Policy Committee minutes from its previous meeting provided little surprise to the market with the voting again indicating that 3 MPC members (Andrew Sentance, Spencer Dale and Martin Weale) out of the 9 voted for an increase in the official cash rate at the banks April 07th meeting. In addition to is, the Asset Purchase Programme remained in place at GBP200 billion.

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After the release the Pound trade between 1.6306 and 1.6424 in the European and US session as speculation continued amongst market participants that the Bank of England will continue to lag behind other G20 countries in raising interest rates. Versus its southern hemisphere counterparts, the Pound Sterling is trading at 1.5330 against the AUD and 2.0608 against the NZD.

We expect a range today of 1.5230 to 1.5430

Majors: European financial assistance to Portugal and the potential restructuring Greece and Irish debt continued to be the dominant theme out of Europe last night. During the Asian session the EURO's advance stalled somewhat just above the 1.44 mark on the back of a weaker reading in German PPI (Producer Price Index) which fell marginally by 0.3% to an actual reading of 0.4%.

For the remainder of the session EURUSD moved between 1.4401 and 1.4547 after an oversubscribed 10 year bond auction held by Spain spurred some EURO confidence. The market continues to believe that that the European Central Bank will again tighten interest rates when it meets again next month and that it may be the start of a tightening trend in Euro Land. The Greenback has lost some against the Japanese Yen and is currently changing hands at 82.49, down almost 0.60% from the high of 83.09 less than 12 hours ago.

Data releases

AUD: PPI

NZD: No data scheduled for release

JPY: No data scheduled for release

GBP: Retails Sales m/m; Prelim Mortgage Approvals

EUR: German Ifo Business Climate

USD: Unemployment Claims; Philly Fed Manufacturing Index

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