Australian Dollar: The Australian dollar maintained recent strength onshore yesterday consolidating well above 1.02 and establishing itself at 1.0260 to enter offshore trade. With little of note to report during the day it became a different story during London hours as the Reserve Bank of Australia predicts a flood of capital into the country totalling $120bn as the currency hits new post-float records.

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Such a prediction has been based on the mining boom increasing exports and investment interest from overseas investors, especially in the wake of decreasing faith in the US Dollar.. We have seen strong corporate demand push the Aussie to 1.0296 on Friday and this new release from the RBA triggered a rally through $1.03 for the first time but strong resistance and sell orders pushed levels back below. Some poor US data gave rise to a second attempt, but the Aussie fell short and we open today at 1.0250.

We expect a range today of 1.0190 - 1.0280

New Zealand Dollar: The New Zealand Dollar in most part managed to stay above the 75 cent handle yesterday after opening the week slightly lower. Support gave way in the early hours of offshore trade and the Kiwi touched a low of 0.7490 however a mixed bag of US fundamental data pushed the Greenback lower and a rally back through 75 cents to 0.7550 followed.

We open today back down at 0.7510 with the country's Trade Balance due this morning, expected to increase to 238 million. At similar levels to yesterday against the Aussie, one New Zealand Dollar is buying 0.7335 cents.

We expect a range today of 0.7470 - 0.7550

Great British Pound: A decrease in average house prices for February eroded support levels overnight last night and the Great British Pound dropped to lows of 1.5940. In the hours that followed words from Bank of England board member Andrew Sentance held a hawkish tone and Sterling climbed back to pare these losses although many remain sceptical the rebound holds any substance as the Monetary Policy Committee still appear to be content with a 'wait and see' approach to raising the bench rate.

Opening today, we see the Pound struggling to break back through the $1.60 handle and is currently at 1.5990. After dropping to 1.5497 overnight the Pound is back to 1.5610 against the Australian Dollar and 2.1280 against the Kiwi.

We expect a range today of 1.5550 - 1.5680

Majors: In a quiet start to the week on the economic calendar and barely a peep out of the USD/JPY it is no surprise the market has focused on European debt and US fundamentals. The Euro remained at recent lows for most of Asia and Europe, finding support at 1.4020/30 as markets continue to speculate Portugal is to share in Ireland's ill fate. Some relief was provided to the shared currency as US data presented a mixed bag to investors and a rally off the back of this saw it push to 1.4110. Pending Home Sales were the big surprise as they unexpectedly rose by 2.1% from a previous decline of almost 3%. The Greenback showed a muted response to this however as ongoing weakness in the Private Sector remains in the forefront of people's minds. Despite a 0.7% increase in Personal spending, rising energy costs are still an issue and with a decrease in personal income the Dollar lost ground against most of its counterparts. Opening today we see the Euro at 1.4090 and the Yen marginally lower at 81.70.

Data releases

AUD: HIA New Home Sales m/m

NZD: Trade Balance

JPY: Household Spending y/y; Unemployment Rate; Retail Sales y/y

GBP: Current Account; Final GDP q/q; Net Lending to Individuals m/m

EUR: GfK German Consumer Climate; German Prelim CPI m/m

USD: CB Consumer Confidence; S&P/CS Composite-20 HPI y/y

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