:: Australian Dollar: The Australian Dollar fell below 0.9100 US earlier in the day following an unexpected decline of -3.3% in June building approvals. Expectations had been for an increase of approximately 2.1%. Australian retail sales also disappointed printing below estimates of 0.4%, increasing only 0.2%. As expected the RBA kept the official cash rate unchanged. A statement from the RBA indicated the reserve bank may take a more neutral stance in the foreseeable future 'with growth likely to be close to trend, inflation close to target and the global outlook remaining somewhat uncertain' further weakened the Aussie. Moving offshore the Aussie erased its losses creating a new 3month high at 0.9150 US after another round of subpar US economic data encouraged investors to dump the Greenback. This morning the Aussie opens at 0.9131 against the US Dollar.

- We expect a range today in the AUD/USD rate of 0.9075 to 0.9150 

:: Great Britain Pound: The Pound rose against the Big Dollar for the ninth consecutive day piercing 1.5960 overnight. Northern Rock reported its first profit boosting sentiment in the UK financial system giving investors the confidence for stronger Sterling trade despite a significant decline in the nation's construction sector. Given that the British economy is showing signs of recovery former Bank of England Deputy Governor John Gieve commented policy makers shouldn't loosen monetary policy further or increase stimulus measures. This morning the Pound is buying 1.5945 US, 1.7465 Aussie and 2.1740 Kiwi.

- We expect a range today in the GBP/AUD rate of 1.7350 to 1.7550 

:: New Zealand Dollar: The Kiwi dipped near 0.7300 following Australia's interest rate announcement. The neutral tones from the RBA indicated rates may hold at 4.25% while Australia's growth remains 'on trend'. The Kiwi fell below 0.7300 late in Asia before recovering offshore. Positive news from the UK wetted investor risk appetite for growth currency as investors turned away from the US haven amid growing evidence of a failing US economy. The Kiwi opens this morning at 07330 against the Greenback.

- We expect a range today in the NZD/USD rate of 0.7275 to 0.7375 

:: Majors: The Japanese Yen strengthen overnight to an 8 month high against the Greenback over concerns the Fed may be considering another round monetary stimulus to boost the frail US economy. The Big Dollar was sent down to 85.66 Yen, the lowest level since November 27th. Japanese Finance Minister Noda expressed little opposition to the current price action noting exchange rates should in principle be set by the market. Meanwhile US pending home sales dropped 2.6 percent in June while personal income and spending remained stagnant. The impact of fresh concerns for the US helped push the Euro higher despite European PPI falling short of expectations.

:: Data Releases:

  • AUD: Trade Balance
  • CAD: No data slated for release
  • EUR: Retail Sales; Final Services PMI
  • GBP: Halifax HPI
  • JPY: No data slated for release
  • NZD: No data slated for release
  • USD: ADP Non Farm Empolyment Change; Challenger Job Cuts

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