Australian Dollar: Sovereign risk concerns in Europe continue to occupy the minds of traders and the associated risk aversion is likely to keep a lid on the Aussie around the US99 cent mark. The unit had several attempts at this level during Monday''s local session with each rally proving unsustainable. During overnight trade, the pattern was similar however the Aussie is holding up reasonably well at time of writing and opens this morning at 0.9925. Today sees the release of the Reserve Bank of Australias December 7 monetary policy meeting minutes. No surprises are expected after the cash rate was left on hold at 4.75 per cent and most pundits tipping rates to remain at that level for some few months yet.

We expect a range today of 0.9860 – 0.9945

New Zealand Dollar: The kiwi opens marginally higher today at 0.7410 against the greenback. The currency has languished recently, dragged down by risk aversion amid the fears the European debt crisis could spread. In local trade on Monday, the unit slipped down to 0.7345 on the back of a weaker Euro currency before hitting an intraday high of 0.7382. Tuesday is likely to be another day of range trading ahead of some key local economic data tomorrow (Balance of Payments) and Thursday (Gross Domestic Product). On the cross rates, the kiwi is near a ten-year low against the Aussie (0.7460) but is outperforming the 16-nation Euro (0.5645).

We expect a range today of 0.7360 – 0.7440

Great British Pound: Sterling opens little-changed against the greenback (1.5510) and higher against the Euro (0.8455) on speculation the Bank of England (BoE) may start raising rates in six months. Minutes of the BoE December 9 monetary policy meeting are to be released tomorrow which is likely to show members remain divided as to the timing of when to move rates from the current record low of 0.5 per cent. Meanwhile, the pound opens weaker against both the Australian Dollar (1.5600) and the New Zealand Dollar (2.0890).

We expect a range today of 1.5550 – 1.5640

Majors: The Euro opens at 1.3110 against the greenback after hitting a two-week low overnight of 1.3093. Speculation continues that some European nations will struggle to raise funds amid the region’s debt crisis. Two state-controlled banks in Ireland (Anglo Irish Bank Corp and Irish Nationwide Building Society) had their senior debt ratings cut by Moody’s Investor Services. Moody’s also lowered Ireland’s credit rating last weekend whilst Greece is under review for a downgrade. The 16-nation currency is unlikely to move higher in this environment. Meanwhile, the greenback opens marginally lower against the Japanese Yen at 83.70.

Data releases

AUD: RBA minutes (Dec)

NZD: Credit Card spending (Nov)

JPY: Bank of Japan rate decision

GBP: Public finances (Nov)

EUR: No data today

USD: No data today

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