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AUDUSD

The Aussie traded slightly lower overnight as Westpac Consumer Sentiment numbers showed a significant drop of -5.7%. Australian Home Loans data for the month of April was released about as expected at -1.8%. In a speech last night, RBA Governor Glenn Stevens expressed concern that Australian household debt is too high relative to other countries, and warned of private citizens over-leveraging. Analysts' forecasts for the Aussie have been rolled back recently as risks from China seem increasingly likely to impact the Australian economy, and the prospect of further rate increases has lessened.

Support/Resistance 0.8202/0.8280

EURUSD

Speculation has begun Fed Chairman Bernanke will sound a more bullish tone today in his Beige Book economic assessment than his counterpart Trichet who will speak tomorrow at the ECB Press Conference. Rate expectations now reflect the market prediction that the Fed will tighten interest rates before the ECB, which marks a reversal of some long-held market views. Some Fed members have called for rates to be raised as soon as Q3 in fact. After having been much-maligned for much of 2009, USD-based assets are becoming increasingly attractive to investors on a relative basis as appetite for European assets has deteriorated and investors have also become wary of risks to Asian markets. For the moment EURUSD remains range-bound between 1.1900 and 1.2000 - a four-year low.

Support/Resistance 1.1915/1.2000

GBPUSD

The Pound Sterling took a battering yesterday as Fitch commented that the UK fiscal challenge was formidable. The size of the UK governments' debt continues to concern global financiers, as newly-elected Premier David Cameron moves to make dramatic cuts in spending. The concern is that interest payments on gilts and other debt will be crippling. GBPUSD traded as low as 1.4345 yesterday but has since recovered to 1.4427 this morning.

Support/Resistance 1.4360/1.4470