:: Australian Dollar: After a quiet Asian session yesterday the Aussie dollar came to life overnight, rallying hard from 0.7950 to open this morning back above the 80 cent handle at 0.8035. Early Europe were sellers of U.S dollars ahead of key Euro-zone and U.S inflation data with many investors also eyeing the release of the minutes to the Feds last meeting. On the whole inflation increased across both regions and it appears the FOMC has no plans of scaling back the treasury purchase plan, all of which gave the market some confidence in the global economic recovery. In Asia today the AUD is likely to find some technical support on any attempted dips below 80 cents however upside gains and a break through 0.8060 could see a retest of 81 cents at some stage.

- We expect a range today in the AUD/USD rate of 0.7990 to 0.8090

:: Great Britain Pound: The Pound Sterling receive some positive economic news overnight with one of the most timely measures of unemployment in the region, the claimant count, increasing but at its slowest pace for over a year during the month of June. The claimant count remained steady at 4.8%, below economist forecast for a rise to 5% during the month sending the GBP/USD up from 1.6300 to 1.6400 in early London trade. With economic optimism returning and equity markets rallying the Pound Sterling continued its upward trajectory to open this morning at 1.6420 against the Greenback. The rally in the Aussie dollar outweighed the gains on the Pound taking the GBP/AUD cross rate lower to open back at 2.0440.

- We expect a range today in the GBP/AUD rate of 2.0350 to 2.0470

:: New Zealand Dollar: Once again the Kiwi experienced little volatility during Asia yesterday trading in a narrow range to enter offshore trade marginally above 0.6400. It was a different story however during the European and U.S time-zones as the NZD was in hot demand rallying to momentarily peak above the 65 cent level. This morning sees the Kiwi open at 0.6485 ahead of the all important market moving Q2 Consumer Price index and the June Performance of Manufacturing Index with inflation expected to increase from 0.3% to around 0.5%.

- We expect a range today in the NZD/USD rate of 0.6425 to 0.6525

:: Majors: The Euro traded higher in early London exchange with Euro-zone June CPI coming in slightly higher than the previous month at 0.2% however the core figure, which excludes food and energy, fell on an annualised basis from 1.5% to 1.4%. After struggling on previous attempts to hold on to gains above 1.4 the EUR/USD rallied to a high of 1.4130 overnight with U.S equities rallying 3% adding momentum to the move. Inflation in the U.S also increased in June from a very modest 0.1% to 0.7% which was only a shade above economist forecasts of a rise to 0.6%. However the big news overnight was the much anticipated minutes to the last FOMC meeting saw risk appetite return to the market. It was revealed that Although an expansion of such purchases might provide additional support to the economy, the effects of further asset purchases, especially purchases of Treasury securities, on the economy and on inflation expectations were uncertain, a sign that plans to reve rse its controversial printing of money policy do not appear to be on the immediate horizon. With investors hungry for risk EUR/JPY rallied hard to reach its highest level since the 7th of July at 133.40 taking USD/JPY up back above 94.

:: Data Releases:
• AUD: No Data Expected today
• NZD: Jun Performance of Manufacturing, Jun Food Prices & Q2 CPI
• USD: May TIC Flows, Jul Philadelphia Fed & Jul NAHB Housing Market Index
• GBP: No Data Expected today
• EUR: French Jun CPI
• JPY: No Data Expected today
• CAD: No Data Expected today

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