:: Australian Dollar: With many beginning to question the sustainability of the recent increase in sentiment surrounding a global economic recovery and commodity prices the Aussie dollar appears to have found some relatively solid topside resistance. Early offshore investors attempted to take the AUD/USD through the psychological 80 cent barrier on the back of an increase in demand for Euro and general U.S dollar weakness but failed to do so with the local unit peaking at 0.7995 only to retreat back to 0.7850. U.S inflation came in unexpectedly lower than economist forecasts sending treasury yields lower taking the Greenback with it so the AUD/USD finished the session back at 0.7935.

- We expect a range today in the AUD/USD rate of 0.7875 to 0.7975

:: Great Britain Pound: It came as welcome relief to many that despite another increase in U.K unemployment the rise was less than predicted with the 39.3k rise in jobless claims during May the smallest monthly increase since July 2008. The news gave the Pound Sterling some upside momentum in early trade as GBP/USD rallied to 1.6480 prior to the release of the minutes to the June 4 BoE meeting. The Monetary policy Committee or MPC as its commonly referred to kept interest rates on hold at 0.5% and unanimously voted to continue its 125 billion GBP bond purchase plan. However the MPC did conclude that although there were some early signs that the severity of the recession was diminishing the “medium-term outlook for the economy, and thus inflation” had not changed materially. The GBP did an about face and collapsed subsequent to the release dropping to 1.6220 however with the Greenback then falling out of favour with investors after the U.S CPI figures the move was short lived and GBP/USD opens this morning at 1.6390. With the Aussie dollar opening around yesterday's Asian closing levels the GBP/AUD cross rate is exchanging at 2.0660 in early morning trade.

- We expect a range today in the GBP/AUD rate of 2.0550 to 2.0720

:: New Zealand Dollar: It seems the local market ignored comments from the RBNZ Governor Bollard who attempted to talk down the Kiwi saying that if ”markets are buying the NZ dollar on the expectation of a strong recovery they may end up being disappointed”. The reaction to the comments did trigger a brief sell off to 0.6250 however support held and the NZD rallied to an early European high of 0.6345. The volatility continued overnight with another test of support at 0.6250 holding and the Kiwi opening this morning back at 0.6330 after the market began to scale back expectations of a rate rise in the U.S.

- We expect a range today in the NZD/USD rate of 0.6280 to 0.6380

:: Majors: In a sign of resilience for the European economy the regions Trade balance surprised the market to record the largest surplus since October 2007. Economists had been expecting the April figures to indicate a turn around from a 1.8 billion EUR Surplus in March to a 1.5 billion deficit with the 2.7 billion Euro result inspiring an early rally. EUR/USD jumped to 1.3925 in early London trade before settling back around 1.3870 for the majority of the session. U.S economic data revealed a shock decrease in consumer prices as official CPI figures for May indicated drop in headline inflation by 1.3% for the year to date against expectations of a lesser fall from -0.7% to -1.3%. The news started some selling in the greenback which fell to 1.3980 Euro and 95.55 Japanese Yen.

:: Data Releases:

  • AUD: May International Merchandise Imports & RBA Bulletin
  • NZD: No Data Expected today
  • USD: May Leading Indicators & Jun Philadelphia Fed Survey
  • GBP: May Retail Sales
  • EUR: No Data Expected today
  • JPY: No Data Expected today
  • CAD: May CPI