Australian Dollar: The Aussie spiked sharply above US99 cents during local trade yesterday after stronger-than-expected producer price data (PPI) increased the prospects for an interest rate rise next month. Australia''s PPI at the final stage of production rose 1.3 per cent in the September quarter - more than double the 0.5 per cent expected by most economists. The buying continued during the European session and the unit hit a high of 0.9973. Tomorrow sees the release of third quarter inflation data and anything above the forecast of 0.8 per cent may see the Aussie push through parity during the local session.

We expect a range today of 0.9845 - 0.9965

New Zealand Dollar: Despite local markets being closed yesterday for Labour Day, the kiwi managed a US1-cent range as it followed a higher Australian Dollar to finish the Asian session around 0.7530. Stronger-than-expected producer price data across the Tasman had their currency on another run towards parity with the greenback. Meanwhile, momentum continued during the offshore session which saw a high of 0.7560. Against the Aussie, the kiwi opens lower today at 0.7590. Interest rates in new Zealand are expected to remain on hold at 3 per cent later in the week when the RBNZ announces its rate decision on Thursday.

We expect a range today of 0.7490 - 0.7560

Great British Pound: Despite another round of greenback weakness, pound sterling opens little-changed at 1.5725 against its US counterpart after a slump in mortgage approvals heightened speculation the Bank of England may need to buy more assets. The number of home loans granted in September was 31,104 - an eighteen month low. In overnight trade, the pound moved between a low of 1.5655 and a high of 1.5772. Meanwhile, the pound opens weaker against both the Australian Dollar (1.5880) and the New Zealand Dollar (2.0910).

We expect a range today of 1.5800 - 1.5900

Majors: The so-called big dollar is weaker against a basket of currencies after the weekend's Group of 20 pledge to avoid "competitive devaluation" failed to dispel speculation the US Federal Reserve will debase the greenback by announcing a second round of quantitative easing. The dollar dropped to a 15-year low against the Japanese Yen at 80.41. Meanwhile, the 16-nation Euro opens at 1.3963 after hitting an overnight high of 1.4079. There is strong technical resistance around the 1.4000 area.

Data releases

AUD: No data today

NZD: No data today

JPY: No data today

GBP: GDP, Q3

EUR: German Gfk Consumer Confidence survey

USD: Consumer Confidence, Oct

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