:: Australian Dollar: The Aussie dollar bounced from an early morning dip to 0.9235 yesterday to trade within a whisker of the 93 cent handle overnight buoyed by gains in commodity and equity markets. Local equities posted strong gains whilst gold prices hit record highs above $1200 an ounce helping the AUD/USD exchange rate. The move was tempered somewhat in late U.S trade following a disappointing employment report sending the Aussie back to this morning's open around 0.9235. This morning sees the release of important October Retail Sales data with some improvement in consumer spending expected to see a result of around +0.3% for the month.

- We expect a range today in the AUD/USD rate of 0.9200 to 0.9300

:: Great Britain Pound: The Pound Sterling rallied during European trade after surviving an initial sell off to 1.6550 against the Greenback, exchanging as high as 1.6695 in overnight trade. The move was originally sparked by a slightly better than expected U.K Purchasing Managers Index for the construction industry with further momentum coming on the back of a move higher in EUR/USD. During the U.S session however demand for the Greenback emerged and the Cable finds itself sitting around 1.6630 this morning. With the Aussie dollar pulling back from its overnight highs the GBP/AUD cross rate opens this morning hovering around 1.8000 ahead of today's Australian Retail Sales data which is sure to move the market in Asia.

- We expect a range today in the GBP/AUD rate of 1.7920 to 1.8050

:: New Zealand Dollar: The Kiwi traded sideways for the majority of the overnight session bouncing between 0.7260 and 0.7290. That was until the release of several key U.S economic data late in the piece that triggered a reversal in its fortunes. Coming ahead of this Friday's U.S payroll data a larger than expected increase in the number of job losses as measured by the ADP employment report caught the markets attention, turning investors away from the high yielding NZD. This morning sees the Kiwi exchanging on its lows at 0.7205 with only the ANZ November Commodity Price Index scheduled for release, information that is not likely to move the currency a great deal. Direction in our time-zone is instead expected to come from the release of Australian Retail Sales data with a larger than 0.3% increase likely to spark a rally in the AUD.

- We expect a range today in the NZD/USD rate of 0.7180 to 0.7300

:: Majors: The Euro hit a high of 1.5110 against the Greenback in early offshore trade overnight following a higher than forecast +0.2% reading in the October Producer Prices Index. Most economists had predicted a rebound from the previous months -0.4% result with consensus being for a flat 0% result triggering a move from 1.5065 to the highs. Despite several attempts to continue the rally EUR/USD then retreated back to its recent range opening this morning back at 1.5035. The pullback came after a disappointing U.S ADP employment report signalling 169k jobs lost in November forcing some analysts to downgrade forecasts for Friday's key payroll data. As a consequence Wall Street reversed early gains following the report to finish the session marginally in the red putting a dampener on risk appetite which helped the Greenback firm. Also weighing on risk appetite was the release of the U.S Federal Reserve's so called beige book, a business survey used to assist the central bank in setting monetary policy. The report indicated some improvement in conditions although the economy expanded only modestly from October through to mid November, the markets had been hoping for a more hawkish assessment.

:: Data Releases:

  • AUD: Oct Retail Sales
  • NZD: Nov ANZ Commodity Prices
  • USD: Q3 Forecast Unit Labour Costs, Q3 Forecast Non-Farm Productivity & Nov ISM Non-Manufacturing Composite
  • GBP: Nov Services PMI
  • EUR: ECB Meeting, Oct Retail Sales & Q3 Prelim GDP
  • JPY: Q3 Capital Spending
  • CAD: No Data Expected Today
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