Australian Dollar: The Australian Dollar dropped from 0.9890 to 0.9865 in quick fashion yesterday on the release of a weaker than expected reading in Producer Price Index. PPI at the final stage of production rose 0.1% compared with a forecast of 0.5% with import prices being attributed as one of the key factors for the fall.

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During the offshore the Aussie fared a lot better and traded between 0.9885 and 1.0019 as global equities gained spurring demand for riskier assets. Today's release of CPI (Consumer Price Index) should provide movement for the local unit with the forecast number to come above the previous quarter on quarter reading.

We expect a range today of 0.9900 to 1.0000

New Zealand Dollar: With Wellington enjoying a Public Holiday (Anniversary Day) yesterday movements during local time for the Kiwi were limited. During local time the NZ Dollar traded sideways (0.7560 to 0.7600) before tracking higher in the offshore session to hit an intraday high of 0.7656 as a return to riskier assets took hold. All eyes this week in New Zealand will be the RBNZ interest rate decision and statement due out on Thursday with many expecting no change in official rates but it will be the accompanying statement from Governor Allan Bollard that will attract the most attention. Rates are not expected to be raised in NZ until at July 2011.

We expect a range today of 0.7580 to 0.7680

Great British Pound: The British Pound continues to hover around the 1.60 mark against the US Dollar but appears to be having some trouble consolidating above this level. During the last 24 hours it has traded between 1.5919 and 1.6013 as another day of Greenback selling took hold in the market. Tonight's Preliminary GDP which is expected to fall by 0.2% from 0.7% to 0.5% will be closely watched by market participants, with a lower number having the potential for the Pound to test 1.5900 and below. Against the Australian Dollar and New Zealand Dollar the Pound is currently changing hands at 1.6030 and 2.0950 respectively.

We expect a range today of 1.5900 to 1.6100

Majors: The EURO continues to hold steady against the Greenback as investor confidence seems to be returning to the 16 nation currency. Overnight the EURO traded to a low of 1.3539 and a high of 1.3680 as mixed data out of France and Germany (Flash Manufacturing and Services PMI) indicated that Europe is on the recovery track. Adding to the positive EURO sentiment last night was news out of Spain about how it would finance local bank debt in the area. The Federal Open Market Committee interest rate decision and QE2 policy released Thursday is the key release for the US Dollar this week however the market is expecting no change in either strategies to place.

Data releases

AUD: CPI q/q

NZD: No Data slated for release

JPY: Overnight Call rate and Monetary Policy Statement

GBP: Prelim GDP q/q; Public Sector Net Borrowing

EUR: GfK German Consumer Climate, French Consumer Spending

USD: CB Consumer Confidence; HPI m/m; Richmond Manufacturing Index