:: Australian Dollar: In what was a very lacklustre Asian session yesterday the Aussie dollar traded sideways between 0.8860 and 0.8880 for the majority of the day as local investors searched for inspiration. After an initial dip to 0.8850 during early European trade the AUD/USD then bounced back to retest the 89 cent handle and opens this morning just shy of the mark at 0.8890. With the U.S enjoying the President's Day holiday it was a quiet session in North America however the release of the RBA board minutes for the recent meeting where rates were left on hold and a talk by RBA assistant governor Debelle are likely to spark the Aussie dollar into action today.

- We expect a range today in the AUD/USD rate of 0.8850 to 0.8925

:: Great Britain Pound: The Pound traded between 1.5640 and 1.5680 in Asia yesterday and started offshore trading at an intraday low of 1.5610 USD amid fears that the UK mortgage market may again come under financial pressures. Moody's had assessed that British banks may struggle to refinance 319 billion pounds of mortgaged backed bonds as the Government prepares to wind down its Special Liquidity Scheme and Credit Guarantee Scheme. However the GBP gained 0.7% upon news that housing prices had increased 3.2% as the Sterling rallied back up to 1.5690 before hitting a high of around 1.5720 near the start of US trade. During holiday thinned US trade the Pound edged lower starting today at 1.5660 against the Greenback and 1.7610 versus the Aussie.

- We expect a range today in the GBP/AUD rate of 1.7550 to 1.7650

:: New Zealand Dollar: The Kiwi gained just over 0.5% against the USD during offshore trade peaking at 0.6988. New Zealand's Performance Services index, though not as high as last month's 54.4, was still in the green at 53.1 for January. Investor enthusiasm dampened during the US session and the Kiwi fell amid concerns over sovereign debt problems which continue to plague Greece and other European nations sapped the market's appetite for higher yielding assets. The Kiwi opens higher at 0.6975 USD head of positive expectations for today's PPI figures.

- We expect a range today in the NZD/USD rate of 0.6950 to 0.7015

:: Majors: Japanese economic growth data beat expectations of an increase in year to date GDP to around 3.5% coming in at a whopping 4.6% during Q4 2009. The weak Yen helped exports and with improvements in global demand mainly led by China also playing a big role growth in the region beat economist forecasts. Despite the positive news the JPY weakened against the USD trading to 90.20 in Asian trade as many analysts expect the rise in GDP to be relatively short lived. With little in the way of offshore economic data for direction overnight it emerged that the Greece finance ministry had entered into interest rate swaps as a means to defer interest payments by several years, a common practice however one that cast some doubt as to the true debt burden. The news hit risk appetite with EUR/USD trading to a low of 1.3580 on two occasions, down from its overnight peak around 1.3635. With the U.S scheduled back from a long weekend this evening and more comments from EU officials likely to emerge the volatility is expected to increase once again as EUR/USD continues to edge closer to 1.35.

:: Data Releases:

  • AUD: RBA Board minutes & RBA Speak
  • NZD: Q4 PPI
  • USD: Feb Empire Manufacturing, Long Term TIC Flows & Fedspeak
  • GBP: Jan CPI & Jan RPI
  • EUR: Feb ZEW Survey
  • JPY: No data expected today