:: Australian Dollar: The AUD/USD bounced from intraday support at 0.8465 on two occasions during early morning exchange yesterday rallying during the afternoon session to enter offshore trade edging towards 0.8550. The move came despite a large 6.4% drop in HIA New Home Sales during the month of May with the local market focusing instead on slightly higher private sector credit growth. Positive sentiment in Europe gave it a nudge through 0.8550 however the move was short lived with concerns about stalling jobs growth out of North America escalating, putting another dent in the markets confidence on the sustainability of a global economic recovery. Support at 0.8465 gave way during the U.S time-zone sending the Aussie dollar to this morning’s open of 84 cents with today’s Australian Retail Sales and Building Approval data releases to be closely scrutinised by the markets.

- We expect a range today in the AUD/USD rate of 0.8330 to 0.8480

:: Great Britain Pound: After valiantly holding on to support ahead of 1.5 the Cable finally gave way to a flurry of selling overnight. A drop in U.K consumer confidence to a six month low and disappointing Nationwide House Price data started the move. Seasonally adjusted June housing figures rose a meagre 0.1%, down from 0.5% the previous month and below economist forecasts for a decline to 0.3%. Concern about U.S jobs growth following a lower than predicted ADP employment report fuelled another round of risk aversion which saw an increase in demand for the Greenback sending GBP/USD lower to open this morning on its lows at 1.4940. The GBP/AUD cross rate remains volatile after dropping from yesterday’s highs around 1.7775 to an overnight low near 1.7550 it opens this morning back on its highs at 1.7775 thanks mainly to a lower Aussie dollar.

- We expect a range today in the GBP/AUD rate of 1.7650 to 1.7825

:: New Zealand Dollar: After consolidating between 0.6910 and 0.6940 for the majority of the Asian session yesterday the Kiwi rejected European attempts to advance through 0.6950 to open this morning a cent lower at 0.6850 against the Greenback. Sentiment towards the NZD changed following the U.S ADP employment report with the lower than predicted result forcing some downward revisions to Friday’s U.S payroll report and economic growth in general. With only second tier local data in the form of the June ANZ Commodity Price index scheduled for release today direction for the NZD is likely to come from developments across the Tasman, in Europe and North America as key economic data is release on Thursday and Friday.

- We expect a range today in the NZD/USD rate of 0.6785 to 0.6900

:: Majors: The Euro rallied in early offshore trade last night buoyed by lower than expected demand for short term funding from the ECB. The central bank allocated 132 billion EUR in 3 month funding to banks across Europe, well below expectations that they may have needed up to 250 billion. With the news that European banks were able to finance debt from money markets risk appetite improved sending EUR/USD up from 1.2210 to an eventual high around 1.2300. June Euro-zone CPI estimates then came in at 1.4%, down from 1.6% the previous month and slightly below forecasts for a result of 1.5% capping the move. A weaker than expected ADP employment report out of North America, only 13k jobs added against forecasts for around 60k, along with trepidation ahead of this evenings ECB announcement on 12 month bank loan maturities then renewed selling interest. Following the U.S data EUR/USD pared back earlier gains and opens this morning back at 1.2230 whilst USD/JPY opens near its lows at 88.40, marginally down from yesterday’s Asian close at 88.65.

:: Data Releases:

AUD: May Retail Sales & May Building Approvals NZD: Jun ANZ Commodity Prices USD: Jun ISM, May Construction Spending, May Pending Home Sales & Weekly Jobless Claims GBP: Jun PMI Manufacturing EUR: Jun PMI & German May Retail Sales JPY: Q2 Tankan Survey