Australian Dollar: The Australian Dollar's advance seems to have been capped as the potential cost of the Queensland floods and its impact on local growth continue to be at the forefront of traders minds. On Friday the dollar spent most of the local day in a tight range (0.9800 to 0.9860) before moving above the 99 cents level during the European and US session as positive EURO data releases sparked a brief bought into riskier assets.

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PPI (Producer Price Index) is due out this morning with forecast expected to well down of the previous quartered reading of 1.3% with the potential to see some Aussie selling. The Australian Dollar is up against the New Zealand Dollar and is currently changing hands at 1.3041.

We expect a range today of 0.9800 to 0.9900

New Zealand Dollar: The release Friday of Retail Sales dampened demand for the Kiwi with the report coming in well below expectations. The NZ Dollar dropped to 0.7546 on the release and has many economists predicating that interest rates in New Zealand will remain on hold until at least the third quarter. The RBNZ is scheduled to meet Thursday this week and the accompanying statement will be heavily looked at by traders for any hints to the timing of any future cash rate adjustments. In offshore trade the Kiwi''s movements were limited (0.7520 to 0.7580) with it failing to consolidate above 0.7600 cents.

We expect a range today of 0.7500 to 0.7600

Great British Pound: Retail Sales for December came in at -0.3% a report released Friday indicated as one of the worst winter periods in more than a century curtailed local shoppers spend. Despite this poor reading the Pound still managed to hold on the 1.60 handle against the Greenback with the pair trading between 1.5880 and 1.6020 on Friday. Adding to CABLE volatility this week will be the release of GDP (Gross Domestic Product) and the Bank of England minutes. Against its southern hemisphere counterparts, the Pound is trading at 1.6150 against the Australian Dollar and 2.1050 against the New Zealand Dollar.

We expect a range today of 1.6000 to 1.6200

Majors: The EURO continued its recent form against the Greenback Friday as comments from European Central Bank Executive Member Jurgen Stark came out indicating that that ECB would look to strengthen the regions rescue fund. The EURO hit an intraday high of 1.36 as reports out of both France (Business Indicator) and Germany (IFO Business Climate) came in well above forecast. The Greenback will face further tests this week as a raft of top tier releases are scheduled and include Wednesday's Consumer Confidence report and Thursday's Federal Open Markets Committee interest rate decision. Against the Japanese Yen, the US Dollar is steady and trading at 82.50.

Data releases

AUD: PPI q/q

NZD: No Data slated for release

JPY: No Data slated for release

GBP: No Data slated for release

EUR: German and French flash Manufacturing and Services PMI; EuroZone Industrial New Orders

USD: No Data slated for release

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