Australian Dollar:

The Australian Dollar rallied strongly yesterday as investors snapped up the higher-yielding currency. While the Dollar traded sideways in the early hours of the Asian Session Yesterday the Aussie took off mid afternoon reaching an eventual high 1.0968 against its US Counterpart.

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Driving the currency higher RBA Governor Glenn Stevens reiterated in a speech in Sydney yesterday that he expected the Nation's economic outlook to improve as consumer confidence gains momentum in the coming months. With US Dollar weakness again remaining a major theme throughout financial markets and CPI Data expected for release today the Australian Dollar remains poised to re-test its historical post-float highs above the 1.10 level as the currency opens a full cent higher this morning at a rate of 1.0953

We expect a range today of 1.0890 - 1.1000

New Zealand Dollar:

The New Zealand Dollar initially fell yesterday after the statistics bureau released figures showing the nation's trade surplus narrowed with exports falling to a five month low. Despite the figures showing Exports exceeded imports by NZ 230 Million, the New Zealand currency rallied hard from an early morning low of 0.8611 hitting an all-time post float high of 0.8742 against its US Counterpart. With several counterparties and Traders alike selling the US currency across the board the kiwi remains well favoured ahead of a weaker Greenback. Meanwhile looking ahead further currency advancements remain a distinct possibility this week with the RBNZ due meet on Thursday as well as a market clearly spooked by ongoing breakdowns in US Debt negotiations. This morning sees the New Zealand Dollar open around 60 basis points higher currently buying 87.00 US Cents

We expect a range today of 0.8640 -0.8730

Great British Pound:

The Great British Pound opens more than a full cent higher against its US Counterpart this morning currently trading at a rate of 1.6403. In what proved to be a mild relief rally for the Sterling, investors snapped up the UK Based Currency driving it to a six-week high against the dollar at a rate of 1.6428.While talks of a US debt default continue to dominate offshore headlines, locally the Sterling was well supported by a report released yesterday showing UK Economic Growth matched readings previously forecast with Gross Domestic Product rising 0.2 percent for the second quarter of 2011. Meanwhile this morning the Great British Pound opens relatively unchanged against the Australian Dollar at a rate of 1.4989.

We expect a range today of 1.6350- 1.6460

Majors:

The Major theme of recent times continued throughout foreign exchange markets yesterday as investors sold the US based Currency across the board. With traders essentially looking to hold wealth in anything but the Greenback the US Currency depreciated against all 16 of its major peers including the Japanese Yen which reached an overnight low of 77.821. The Dollar Index declined 0.7 percent yesterday, as the Democrats and Republicans continue to wrangle over competing plans to cut the impending deficit. As US Congress continue to show signs of deep segregation the effects on global markets has already been well witnessed. Overnight the EURO rallied over a cent reaching an eventual high of 1.4525 before settling to where we open this morning at a rate of 1.4509 against its US Counterpart. With many underlying fundamentals playing a secondary roll this week to concerns surrounding a potential debt default in the US, there remains growing anger and disbelief that common ground cannot be found for the greater economic good.

Data releases

AUD: CPI q/q

NZD: NBNZ Business Confidence

JPY: No Data Today

GBP: CBI Industrial Order Expectations

EUR: German Prelim CPI m/m, M3 Money Supply y/y, Private Loans y/y

USD: Core Durable Goods Orders m/m, Beige Book

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