:: Australian Dollar: Despite several attempts to recapture the 92 cent level in Asia yesterday the Aussie dollar retreated and opens this morning back below 91 cents on technical support at 0.9080. Strong demand for the Greenback emerged as investors flocked to the safe haven of U.S dollars amidst persistent concerns around European sovereign debt and global economic growth. USD strength, particularly against the EUR is expected to continue and as such is likely to also weigh on the AUD/USD exchange rate in the near term. With only second tier local economic data released this week the markets will be eyeing RBA governor Stevens speech in Sydney on Friday for any remarks relating to the direction of interest rates or the state of the economy.

- We expect a range today in the AUD/USD rate of 0.9020 to 0.9120

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:: Great Britain Pound: Traders were not impressed with the Pound as they continued to sell off the currency overnight. The Sterling met with brief reprieve after Germany and France reported better than expected economic figures pushing the Pound to 1.5020. The UK government's annual budget announcement in which the Treasury lowered GDP forecasts from 3.5% to 3-3.5% growth for the coming year gave investors the green light to turn to the Greenback. During US trade the Pound levelled out at 1.4870 late in the session. This morning the Sterling opens at 1.4880 against the US Dollar and buying 1.6384 Aussie.

- We expect a range today in the GBP/AUD rate of 1.6320 to 1.6420

:: New Zealand Dollar: In the aftermath of New Zealand's disappointing Current Account figures which was reported to be -3.57 billion, almost doubling already pessimistic predictions, the Kiwi dipped to 0.7025 against the US dollar but quickly corrected back to 0.7060. During Asian trade investors lost confidence in the Kiwi as it fell back to 0.7025. Offshore risk appetite improved briefly following positive economic data from Europe and the Kiwi saw itself back at 0.7050. Throughout the offshore session however investors rode on a wave of adverse risk sentiment flowing from Europe and the Kiwi momentarily broke below 0.7000. After a bumpy night against the USD the Kiwi opens at 0.7015 ahead of todays critical fourth quarter economic growth data with GDP expected to improve from 0.2% in the previous quarter to around 0.8%.

- We expect a range today in the NZD/USD rate of 0.6960 to 0.7050

:: Majors: German IFO business climate survey climbed to 98.1 the highest since June 2008 however the news was overshadowed by Germany's continued defiance to provide aid to Greece. Adding salt to the Euro's wounds Portugal was downgraded to AA- by Fitch. The Euro continued its slide down as the US reported better than expected durable goods orders pushing below critical technical support around 1.3450. A flight to quality saw the USD strengthen to a 10 month high opening today at 1.3314 against the EUR and its highest level since January 12 against the JPY at 92.30.

:: Data Releases:

  • AUD: No Data Expected
  • NZD: Q4 GDP
  • USD: Weekly Jobless Claims & Fedspeak
  • GBP: Feb Retail Sales
  • EUR: Apr German GfK Consumer Confidence Survey
  • JPY: Feb Corporate Service Price