:: Australian Dollar: The Australian Dollar held above the 88 cents mark yesterday as news out of China indicated that economic forecasts would keep pace with expectations in 2010 and that it would maintain stimulus polices currently in place. With the Australian dollar and the local economy very much reliant on happenings in China, the dollar hit an intraday high of 0.8889 during local trade before moving higher in Asian and European trade to eventually hit an overnight high of 0.8993, its highest level against the Greenback in almost 2 weeks. The release stateside of Consumer Confidence and S&P/Case-Shiller Home Index did put the halt on the Aussie's advance and it was almost immediately sold down to 0.8940. Again no local data is scheduled for release today, so direction comes from overseas news and events.

- We expect a range today in the AUD/USD rate of 0.8880 to 0.8980 

:: Great Britain Pound: Cable remained within a 2 cent range last night as a lack of UK data and better than expected US data helped the Greenback appreciate to a high of 1.5865 overnight. Also weighing on the Pound's advance was a release indicating that UK house prices would decline in 2010 as unemployment was expected to continue to rise and concern in some circles about the government's current plan to stimulate the economy. The Pound did initially rally during European time against the US Dollar however the data release stateside saw the Pound sold off in dramatic fashion with it falling from just above 1.60 to 1.5865. Against its southern hemisphere counterparts, the Pound is slightly higher against the Australian Dollar (1.7770) and New Zealand Dollar (2.2110).

- We expect a range today in the GBP/AUD rate of 1.7650 to 1.7800 

:: New Zealand Dollar: The New Zealand Dollar followed the Aussie up last night with the Kiwi pushing through the 0.7200 cents level as a brief return to risk appetite propelled high yielders up. The Kiwi traded between 0.7080 and 0.7214 in offshore trade and opens at time of writing at 0.7180. On the data front there is nothing out of New Zealand so one suspects direction will again come from offshore events and data releases.

- We expect a range today in the NZD/USD rate of 0.7100 to 0.7200 

:: Majors: US Consumer Confidence for December came in better than expectations with the figure up 3.4 to 52.9 from a previous reading of 49.5. The news is an encouraging result as it paints a picture to traders worldwide that confidence among the US consumer is on the rise and thus points to signs that the economy will continue to expand in 2010. Despite a disappointing reading in the S&P/Case-Shiller Home Price Index for October, Greenback demand did not falter overnight with the big dollar still holding all the cards against the EURO (1.4358), GBP (1.5902) and JPY (91.96), however the it is down against a basket of commodity based currencies. In Europe a slight increase in German CPI did propel the EURUSD through the 1.44 level to a high of 1.4450 however on release of the US data the EURO plummeted to almost 1 cent to hit an eventual offshore low of 1.4331. Data is light in both Europe and the US tonight so currencies are expected to remain range bound in trading.

:: Data Releases:

  • AUD: No data releases
  • CAD: No data releases
  • EUR: Euro Zone M3; Italian Large Company Employment and Produce Price Index
  • GBP: No data releases
  • JPY: Nomura/JMMA Manufacturing Purchasing Index (DEC)
  • NZD: No data releases
  • USD: API US Crude Oil and Gas Inventories; ABC Consumer Confidence