Australian Dollar: A story of two halves for the Aussie over the last 24 hours. The currency rallied to a high in Asian trade of 1.0770 after France and Germany announced they had agreed on a Greek debt restructuring deal. The mood turned somewhat as attention quickly turned to local issues. The National Australia Bank's quarterly business survey released yesterday indicated that confidence is down, particularly in the retail and manufacturing sectors.

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Currency markets reacted very quickly taking the Aussie down to an intraday low of US107 cents. However, in offshore trade and as further details emerged from the summit of European leaders in Brussels, investors bought risk currencies and took the Aussie to a nine-week high of 1.0850 ahead of Friday's opening level of 1.0836. With the Euro also sharply higher against the greenback, the Aussie is weaker on the cross rates opening at 0.7500 against the 17-nation currency.

We expect a range today of 1.0780 - 1.0880

New Zealand Dollar: The Kiwi touched a fresh post-float high of 0.8586 on Thursday amid euro zone optimism as France and Germany announced they had agreed on a Greek debt restructuring deal. The Euro and the Australian Dollar also rallied on this news. Markets were getting a little ahead of themselves and the currency gains proved short-lived which saw the kiwi lose half-a-US-cent before steadying at 0.8550. The wave of positive sentiment continued in offshore trade which saw further highs for the kiwi all the way to 0.8642. As always, nothing is ever a "straight line" higher and the currency can expect to run into resistance around these levels. The kiwi opens on Friday at 0.8630 against the greenback and 0.7950 against the Australian Dollar.

We expect a range today of 0.8600 - 0.8660

Great British Pound: UK Retail sales rose 0.7 per cent in June pushing the pound to a 5-week high against its US counterpart in overnight trade of 1.6332. The stronger-than-expected result is largely being attributed to discounts and summer sales beginning earlier than usual to attract buyers. Despite the positive session for the pound, headwinds remain for the economy with interest rates likely to remain low for an extended period. Meanwhile, the pound managed to outperform its surging antipodean rivals overnight and opens at 1.5050 against the Aussie and 1.8925 against the New Zealand Dollar.

We expect a range today of 1.5000 - 1.5100

Majors: The Euro (1.4422) opens at two-week highs on Friday against the greenback as European leaders approach agreement on further bailout funds to the region. Risk currencies rallied across the board amid speculation officials meeting in Brussels on Thursday may accept a temporary Greek default as a way of reducing contagion concern in the market. Whilst no decisions have been made at time of writing, policy-makers would aim to keep the period of default as short as possible. Bond yields in Spain and Italy fell for a second consecutive session. Meanwhile, as Senators in the United States outline deficit-reduction plans of their own, the greenback opens lower against the Japanese Yen at 78.31.

Data releases

AUD: Import & Export price indexes, Q2

NZD: No data today

JPY: No data today

GBP: No data today

EUR: German IFO Business Climate, July

USD: No data today

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