European markets kicked off on a weak note overnight, as investors continued to contemplate the latest news of a potential default on Greece's debt and exposures on respective economies. We also saw a mixed bag of economic indicators with the German Consumer Price Index fell 0.1 per cent in November, representing a yearly increase of 0.4 per cent. However German Trade balance recorded a surplus of EUR 13.6 billion beating expectations of a EUR 11 billion surplus. Across the channel the weaker pound did little to support UK exports in the month of October, with the Trade deficit widening to GBP 3.2 billion against the downwardly revised GBP 3.1 billion in September.
The greenback remained well supported early in the session, but lost ground against major counterparts as US equity markets returned to the black. The US dollar index which measures the dollar's value relative to six major foreign currencies is currently trading near day lows of 75.95, representing a loss of 0.36 per cent.
The primary winner against the US dollar was the Kiwi which is currently trading near day highs of 72.2 US Cents. This morning saw the Reserve Bank of New Zealand announce interest rates will stay on hold at 2.5 per cent. The Kiwi dollar was given a leg up against major counterparts as RBNZ Governor Alan Bollard also indicated a change in the central banks stance on interest rates, stating if the economy continues to recover, conditions may support beginning to remove monetary stimulus around the middle of 2010. This is in contrast the central banks earlier stance which suggested interest rates will remain at or below the current level of 2.5 percent until the latter part of 2010.
This also help the Aussie Dollar extend gains against the greenback, which is currently trading at overnight highs of 91 US Cents. This morning's Jobs data is particularly important for Aussie dollar movements, although the unemployment rate is expected to creep up to 5.9 per cent, economists expect the employment data to show 5,000 new jobs created in the month of November, against 24,500 in October.