:: Australian Dollar: With political uncertainty hanging over the Aussie dollar recent attempts at a rally have been short lived as resistance around the 89 cent mark put a lid during yesterdays Asian afternoon session. In offshore trade risk aversion persisted as U.S housing data came in at 10 year lows and equity markets fell. The bearish sentiment hurt the AUD/USD which fell below recent support at 0.8840 to trade within a whisker of the 88 cent mark and opens this morning at 0.8815. AUD/JPY selling also weighed on the local unit with early morning exchange at 74.10 ahead of critical support around the 73 level.

- We expect a range today in the AUD/USD rate of 0.8785 to 0.8875

:: Great Britain Pound: Disappointing U.K Mortgage approval data weighed on the Pound Sterling in early offshore trade however after several attempts support at 1.5370 held against the Greenback. USD weakness emerged during the North American morning session providing a boost for GBP/USD which rallied a big figure to 1.5470. However the move was relatively short lived as investors flocked back to the safety of the U.S dollar with risk aversion fears persisting to send the Cable back to this morning's open at 1.5405. The GBP/AUD cross rate opens higher this morning thanks mainly to a weaker Aussie dollar exchanging at 1.7450 with major technical resistance looming ahead of 1.7550.

- We expect a range today in the GBP/AUD rate of 1.7400 to 1.7525

:: New Zealand Dollar: With many investors expecting the RBNZ to lift official interest rates at the next meeting yesterday's Q3 two year inflation expectations release caught the markets attention. The result came in at 2.6% and below the previous 2.8% reading and the Kiwi sold off in local trade to test the psychological 70 cent level. With poor U.S economic data released overnight the Greenback initially weakened, sending the NZD/USD back up to 0.7080. The move was short lived however as risky assets such as equities declined sharply wiping out the gains. This morning sees the NZD exchanging at 0.7028 after posting an early morning low of 0.6990 against the USD.

- We expect a range today in the NZD/USD rate of 0.6975 to 0.7075

:: Majors: USD/JPY finally broke out of its recent range crashing through 15 year lows and support at 84.70 to exchange as low as 83.60 overnight. With Japanese authorities failing to announce any measures aimed at curbing the Yen's strength the JPY continued to rally buoyed by increasing risk aversion. In a sign that the U.S industrial sector is performing well the Richmond Fed Manufacturing survey released overnight beat expectations with a reading of 11 above forecasts for a drop from 16 to 8. However it was U.S existing home sales that grabbed the headlines as it plunged 27.2% in July, far worse result than economist forecasts for a fall of around13% for the month. The news sent North American equity markets lower with the Dow Jones finishing the session 1.3% in the red. The big dollar regained some lost ground to open this morning at 83.95 against the Yen ahead of todays Japanese Trade Balance whilst in trade with the Euro it opens relatively unchanged at 1.2625.

:: Data Releases:

  • AUD: Jun Conference Board Leadign Index & Q2 Construction Work Done
  • NZD: No Data Expected Today
  • USD: Jul Durable Goods & Jul New Home Sales
  • GBP: No Data Expected Today
  • EUR: Aug German IFO Business Climate
  • JPY: Jul Trade Balance & Jul Corporate Services Price Index