:: Australian Dollar: With aggressive AUD/JPY selling following the release of Japanese economic data the AUD/USD exchange rate fell from its early Monday morning high around 0.9120 to trade as low as 0.9055 during the Asian afternoon. The trend began to reverse after the announcement of a 10 billion dollar aid package for the troubled Dubai World conglomerate sending the Aussie dollar back above the 91 cent handle. During the U.S afternoon it broke above what had been stubborn resistance around 0.9120 to open this morning on its highs near 0.9170. The market will be looking towards today's release of the RBA board minutes for further direction on interest rates and with no central bank meeting scheduled in January a less than hawkish assessment could put a dent in the Aussies stride.

- We expect a range today in the AUD/USD rate of 0.9125 to 0.9225

:: Great Britain Pound: During what was a very volatile period of trade in late Asia and early Europe the Cable initially spiked from 1.6190 to 1.6320 only to fall back to 1.6215, all within the space of a few hours. The initial rally came on the back of the Dubai World news however a larger than predicted fall in the Rightmove House Price index and poor European unemployment data instigated the reversal. A late sell-off in the Greenback sees the GBP/USD open just shy of 1.6300 as the market eyes the release of critical U.K economic data in the form of the Consumer Price and Retail Price indices this evening. With the Aussie dollar trading higher overnight the GBP/AUD cross rate opens on its lows at 1.7775 ahead of the release of the RBA board minutes today which is sure to see an increase in volatility.

- We expect a range today in the GBP/AUD rate of 1.7700 to 1.7850

:: New Zealand Dollar: Local traders seemed to ignore yesterday's release of a meagre 0.2% rise in the REINZ House Price index for the month of November with the Kiwi maintaining a tight trading range between 0.7230 and 0.7250 for the majority of the day. The volatility picked up late in the piece as the NZD survived a dip to 0.7210 to exchange at an eventual high near 73 cents against the USD in offshore trade. The AUD/NZD cross rate remains relatively range bound between 1.2500 and 1.2600 and opens this morning pressing against the top end of the band at 1.2590.

- We expect a range today in the NZD/USD rate of 0.7235 to 0.7320

:: Majors: The Japanese Tankan survey of the manufacturing sector triggered a surge in demand for the Yen in Asia yesterday following a better than expected headline figure. Investors overlooked a weaker capital expenditure component of the report and instead focused on improved sentiment in Japanese manufacturers of large machinery. USD/JPY fell from 89.30 to 88.40 following the release heading into offshore trade around 88.70. The Euro received a big boost in late Asian trade yesterday following the announcement that Abu Dhabi will provide 10 billion dollars in aid to help the troubled Dubai World meet its debt obligations. With risk appetite improving as a result EUR/USD jumped from 1.4620 to a high of 1.4685 in early Europe before the announcement of the fifth straight quarterly increase in Euro-zone unemployment put an end to the rally. A larger than expected 11.1% drop in Industrial Production throughout the region also weighed on the Euro which gave back the majority of its earlier gains to exchange back at 1.4620 heading into the U.S session. In what was a steady North American trading day the major currencies held on to their trading ranges as the big dollar opens this morning at 1.4650 and 88.60 against the Euro and Yen respectively.

:: Data Releases:

  • AUD: RBA Board Minutes & Q3 Dwelling Starts
  • NZD: Half Year Economic and Fiscal Update
  • USD: Nov PPI, Nov Industrial Production & Dec Empire Manufacturing
  • GBP: Nov CPI & Nov RPI
  • EUR: Dec ZEW Sentiment Surveys
  • JPY: No Data Expected Today
  • CAD: Nov Leading Index, Oct Auto Sales & Q3 Labour Productivity