Australian Dollar: Supported by a rally in commodities and Greenback weakness the Australian Dollar has forged its way back above 1.0700 to a brief high near 1.0780. After some recent weakness, the Aussie found its footing yesterday after Chinese CPI was revealed to be better than expected.

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Reporting a year on year figure of 9.5%, growth of the Chinese economy will ultimately mean higher demand for Australian exports and thus our dollar moved from 1.0580 to finish the onshore session at 1.0640. With risk sentiment improving overnight on Bernanke's pledge of additional monetary stimulus if needed, we open this morning noticeably higher at 1.0760. Light on the local economic docket today we have Inflation Expectations to be released however focus will be overnight tonight on some significant US figures.

We expect a range today of 1.0690 - 1.0790

New Zealand Dollar: The New Zealand Dollar rallied back during Wednesday's trade as better than expected Chinese GDP and potential further quantitative easing in the US improves investor sentiment. Hitting fresh record highs now above 84 cents the Kiwi remains well supported ahead of this morning's GDP data. With economists predicting a 0.3% increase in quarterly output markets will be watching closely to see if the actual figures support the current strength of the New Zealand Dollar. Also stronger this morning against the Australian dollar, a lot rides in the health of New Zealand's gross Domestic Product, thus we have a potentially volatile day ahead for the Kiwi. This morning we open at 0.8410 against the Greenback and 1.2780 against the Aussie.

We expect a range today of 0.8330 - 0.8440

Great British Pound: Sterling has reached 3 week highs against the US Dollar overnight as risk sentiment dominates the markets. It would appear China's growth and Bernanke's admission to the potential requirement of additional asset purchasing has dictated the direction of trade, rather than domestic lead indicator's. Unemployment claims in the UK increased considerably more than expected in the month of June, recording an increase of 24,500 opposed to the expected 15,100. It would seem however that the markets ignored this figure for want of more pressing matters offshore. Opening today at 1.6160 against the Greenback, the Pound still remains heavy on the crosses. Sitting just above the 1.5000 handle against the Australian Dollar , the Pound is slightly lower against the Kiwi at 1.9210.

We expect a range today of 1.4940 - 1.5100

Majors: The Greenback plummeted and commodities were the beneficiary overnight when Federal Chairman Bernanke suggested further monetary stimulus, or 'quantitative easing', may be on the cards. He testified before the House Financial Services Committee in Washington DC overnight and was clear in communicating policy makers will provide economic stimulus if needed and if investor demand for higher-yielding assets increased. This admission has eased investor concern and in an environment that is constantly flooded with fiscal and economic concern, provided a degree of relief to the markets. As riskier assets rallied, despite its own quandaries, the Euro pushed from lows below 1.4000 earlier that day to reach 1.4200; the Greenback also lost further ground against the Japanese Yen, reaching lows below 78.80. With the US Dollar remaining on the back-foot heading into the open of the Asian session this morning, investors remain wary as continual swings in risk sentiment still shroud the markets. Economic troubles in Europe are still not over as Fitch downgrades Greece once again overnight and fear of contagion remains a key concern. Some key releases today include European CPI and US Retail Sales, PPI and Unemployment Claims.

Data releases

AUD: MI Inflation Expectations

NZD: GDP q/q; Business NZ Manufacturing Index

JPY: No data due for release

GBP: No data due for release

EUR: CPI y/y; ECB Monthly Bulletin

USD: Core Retail Sales m/m; PPI m/m; Retail Sales m/m; Unemployment Claims

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