Australian Dollar: The Australian Dollar rallied strongly throughout yesterday's domestic session after a surge in local capital expenditure. The unit appreciated to 1.0075 from parity with the greenback early in the session as new expenditure increased 1.3 per cent in the fourth quarter from a revised 6.9 per cent the previous quarter.

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The data underscores investor expectations that interest rates will be hiked at least once in 2011 by the Reserve Bank of Australia. During the offshore session, the currency moved a shade above 1.0100 early in the New York but has drifted back slightly as the flight to the Swiss Franc and Japanese Yen continues. Meanwhile, the Aussie nudged 10-year highs against the New Zealand Dollar yesterday and opens today at 1.3460.

We expect a range today of 1.0000 - 1.0120

New Zealand Dollar: The New Zealand Dollar opens marginally higher against the greenback today at 0.7475. During Tuesday's Asian session, profit-takers took the currency from near two-month lows around the US74.40 area to an intraday high of 0.7477. There is speculation that New Zealand's official cash rate will remain at 3 per cent for some time as the nation copes with the economic aftermath of Christchurch's devastating earthquake and the likely dampening effect on growth. During the offshore session the unit hit a high of 0.7509 where it was met with strong resistance.

We expect a range today of 0.7440 - 0.7520

Great British Pound: Pound Sterling opens weaker against the greenback (1.6130) and the Euro (0.8550) as traders shun risk amid surging oil prices. Also weighing on the pound overnight was a weaker-than-expected report from the Confederation of British Industry which showed retailers expect no growth next month. Bank of England policy-maker David Miles said in a speech yesterday that any move on inflation should be "very gradual". The pound traded in a wide range between a high of 1.6254 down to 1.6084. Meanwhile, the pound opens weaker against both the Australian Dollar (1.5980) and the New Zealand Dollar (2.1560).

We expect a range today of 1.5950 - 1.6050

Majors: Risk aversion and safe-haven buying were again the dominant themes during overnight trade on equity and currency markets. The Euro remains strong and hit a three-week high overnight of 1.3820 as inflationary concerns may hasten tighter monetary policy in the 17-nation zone. As the price of West Texas crude oil nudges US$100/barrel, traders have flocked to the Japanese Yen (81.77) which is trading at three-week highs, and the Swiss Franc, which is trading at all-time highs against the greenback at 0.9250. Economic data in the United States released overnight revealed consumer confidence climbed to its highest level since April 2008 whilst fewer Americans filed for unemployment claims last week.

Data releases

AUD: No data today

NZD: No data today

JPY: Consumer Price Index, Jan

GBP: Consumer confidence survey, Feb; GDP, Q4

EUR: German CPI, Feb

USD: Uni of Michigan confidence, Feb; GDP, Q4