Australian Dollar: Signs of economic recovery world-wide as well as reduced pressure emanating from Egypt has helped the Australian Dollar push to 4-week highs in off-shore trade. With the RBA leaving interest rates on hold at 4.75% and saying nothing unexpected in the accompanying statement the Aussie had a rather uneventful local session however some momentum was gained upon the release of Chinese manufacturing data and we headed into London hours back above parity at 1.0020.Bullish momentum continued throughout Europe and North America and our dollar marched on upwards as impressive manufacturing figures were released around the globe.

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Momentarily hitting some resistance at 1.0080 it was the US figures that pushed us through and the aforementioned 4-week highs were established above 1.0140; opening today at 1.0120.

We expect a range today of 1.0050 - 1.0170

New Zealand Dollar: Following a common theme the New Zealand Dollar has pushed higher against the Greenback overnight as investors flock back to riskier assets. Breaking 78 cents for the first time this year the pair managed to touch all too briefly on 0.7820 and is currently sitting right on 0.7800.

Locally, commodity prices increased and cost of labour is up from last quarter adding to the currency's current bullish momentum. Strong demand for the Australian dollar meant some ground was lost for the Kiwi yesterday although the Aussie fell short at the $1.30 mark and the Kiwi has since managed to reclaim some ground. Opening today buying 77.2 Aussie cents it is a quiet day for the economic calendar on both sides of the Tasman.

We expect a range today of 0.7750 - 0.7840

Great British Pound: Favourable local manufacturing and housing figures have helped the Pound hold above the critical $1.60 level over the past 24 hours. After already pushing slightly higher during Asian trade Sterling catapulted through resistance levels to 1.6140, gaining almost a cent upon the announcement of an increase to 62.0 in UK Manufacturing PMI. With risk sentiment improving Cable continued higher throughout the North American session reaching highs near 1.6160. Strengthening of the commodity currencies means Sterling opens lower against the Australian and New Zealand Dollars. Falling back below 1.60 against the Aussie the market currently sits at 1.5960 and back below 2.07 against the Kiwi the Pound is buying 2.0650 NZD.

We expect a range today of 1.5900 - 1.6020

Majors: Risk-on is the theme of the day buoyed by Manufacturing figures from China and the US as well as easing tensions in the Mideast. The Greenback has slumped overnight, with the Euro rallying above 1.3830 and the Yen to almost 81.30 after input costs for China's manufacturers rebounded in January, European Manufacturing PMI rose to 57.3 and US Manufacturing PMI leapt to 60.8. The US figures showed the greatest month on month expansion since 2004, leaving the US Dollar index to slip as much as 1 percent against a basket of its most-traded counterparts. Investors are also feeling more optimistic in regards to the recent geo-political situation in Egypt and with President Mubarak expected to announce he will not run for another term, markets are more comfortable with any related risk than they have been for the last few days. The Euro and Japanese Yen are opening near highs today still holding at 1.3830 and 81.40.

Data releases

AUD: HIA New Home Sales m/m

NZD: No data due for release

JPY: Monetary Base y/y

GBP: Construction PMI

EUR: PPI m/m

USD: ADP Non-Farm Employment Change; Crude Oil Inventories


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