:: Australian Dollar: After looking vulnerable to more downside in Asia yesterday the Aussie dollar found intraday support at 0.8735 going on to reverse its trajectory and rally during the European time-zone to retest what had been strong resistance around 0.8750. The move began on the back of positive European economic data and continued during North American trade eventually pushing through resistance to exchange above the 89 cent handle for the first time since mid May. Better than expected earnings results out of corporate America, comments from U.S Fed Chairman Bernanke and positive sentiment heading into the release of this evenings stress tests all conspired to boost risk appetite and equity markets which in turn spurred demand for the AUD/USD. This morning sees the AUD open around 0.8925 with only the second quarter import and export price index data scheduled for release.

- We expect a range today in the AUD/USD rate of 0.8850 to 0.8975 

:: Great Britain Pound: The Pound Sterling bounced back overnight from an early London dip to 1.5150 exchanging within a whisker of the 1.5300 mark against the Greenback. Despite a slight reduction in June Retail Sales from +0.8% to +0.7% the result beat expectations of a larger drop to +0.5% proving there is some resilience in spending across the U.K. In addition to the consumer spending result stronger than forecast Euro-zone economic data and a rally on Wall Street improved sentiment towards the GBP/USD as it opens this morning exchanging at 1.5255 ahead of this evenings all important Q2 U.K GDP release. Despite the move higher against the Greenback the Pound Sterling opens lower against the Australian dollar at 1.7075 with demand for the AUD outstripping the GBP.

- We expect a range today in the GBP/AUD rate of 1.7000 to 1.7125 

:: New Zealand Dollar: The Kiwi dollar drifted slightly lower during the Asian morning session yesterday dipping below the 71 cent level following a disappointing reading on the ANZ Consumer Confidence Index. The currency reversed in a big way however, rallying in afternoon and overnight trade to a high of 0.7270 against the Greenback. Demand for the high yielding NZD was spurred by optimism in Europe and the U.S and with risk appetite improving the Kiwi was highly sort after. The move comes ahead of next week's RBNZ interest rate decision where rates are expected to rise again. This morning sees the NZD exchanging at 0.7245 and 1.2320 against the U.S and Australian dollars respectively.

- We expect a range today in the NZD/USD rate of 0.7185 to 0.7285 

:: Majors: Stronger than expected European data gave the Euro a boost in overnight trade jumping from 1.2740 to an eventual high around 1.2930. Flash estimates on the Purchasing Managers Index for both the Manufacturing and Services sectors beat forecasts rising to 56.5 and 56.0 respectively. The value of goods produced by the manufacturing sector in May, as measured by the Industrial New Orders report, far exceeded economist predictions of a -0.1% reading to print at +3.8%. The Euro benefited from the results and with confidence high heading into this evening's release of the European bank stress test results EUR/USD held on to its gains to open this morning at 1.2890 against the Greenback. On day two of his testimony U.S Fed Chairman Ben Bernanke stressed the need to maintain fiscal support by extending the tax cuts, comments which, along with some better than expected earnings results from corporate America helped the Dow Jones Industrial rally 2%. USD/JPY also benefited from the positive sentiment rallying from late Asian lows of 86.35 to a high of 87.20 opening this morning slightly below the 87 handle at 86.95. With all the focus on corporate earnings and the European situation the market seemingly ignored some less than impressive U.S economic data released overnight with weekly jobless rising and June leading index falling choosing instead to focus on improvements in existing home sales and the house price index.

:: Data Releases:

  • AUD: Q2 Import & Export Price Index
  • NZD: No Data Expected Today
  • USD: No Data Expected Today
  • GBP: Q2 GDP
  • EUR: German Jul IFO Report & Bank Stress test results
  • JPY: No Data Expected Today

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