:: Australian Dollar: The Aussie dollar entered offshore exchange edging closer to the 87 cent handle with the market keeping a keen eye on developments in Europe. After trading in a relatively narrow range between 0.8735 and 0.8685 for the majority of the London day volatility increased following some Euro supportive rhetoric and better than expected U.S wholesale inventory data, sparking a jump back to within a whisker of the 88 cent level. This morning sees the AUD/USD exchanging near the highs at 0.8780 with the Westpac Consumer Confidence survey for February scheduled for release.

- We expect a range today in the AUD/USD rate of 0.8725 to 0.8825

:: Great Britain Pound: A blowout in the U.K Visible Trade Balance which measures the difference between tangible imports and exports (not services) during December weighed on the Pound Sterling in early offshore exchange. The 7.3 billion GBP deficit was larger than economist forecasts for a 6.7 billion result pushing GBP/USD to an overnight low of 1.5560. Support held however and whilst it settled around 1.5630 during late Europe another rally emerged during U.S trade to take the GBP back to this morning's open at 1.5700 USD. Despite the volatility in the GBP/USD the GBP/AUD cross rate remained stable overnight with the rally in the Aussie dollar keeping it between 1.7840 and 1.7940 for the majority of the session.

- We expect a range today in the GBP/AUD rate of 1.7800 to 1.7950

:: New Zealand Dollar: The Kiwi held on to support around 0.6820 in local trade yesterday tracking the Aussie higher following an increase in risk appetite and a weakness in the Japanese and U.S currencies. Offshore markets continued the theme with positive U.S economic data in the form of wholesale inventories and Greek supportive comments from EU officials adding to demand. This morning sees the NZD open near its highs at 0.6950 with resistance ahead of the psychological 70 cent barrier likely to be tested at some point soon.

- We expect a range today in the NZD/USD rate of 0.6900 to 0.6985

:: Majors: After pushing back above 1.3700 in late Asian trade yesterday EUR/USD managed to hold on to support around these levels and trade higher during last night's offshore session, despite confirmation of a 0.6% drop in German inflation during the month of January. With European economic fundamentals seemingly taking a back seat in recent weeks the markets continued to focus on the sovereign debt crisis with more comments coming from European officials overnight. Despite the Greek finance minister's view that external aid would be the worse possible signal we could send out incoming European commissioner Olli Rehn said he expected Greece to do the necessary measures and that if they did then support would be coming in the broad sense of the word, Rehn's comments sparked a rally in the Euro to an overnight high around 1.3835. In amongst all this U.S economic data released overnight indicated a 0.8% fall in wholesale inventories during the month of December, a positive result as it beat expectations of a 0.5% rise, signalling an increase in sales by wholesalers. EUR/USD appears to have been forming what is known as a rounding bottom on the hourly chart which indicates some level of support ahead of 1.3600 and with European officials meeting later in the week and early next week more supportive comments could possibly be the catalyst for continued gains.

:: Data Releases:

  • AUD: Feb Westpac Consumer Confidence
  • NZD: No Data Expected
  • USD: Dec Trade Balance
  • GBP: Dec Industrial Production & BoE Quarterly Inflation Report
  • EUR: No Data Expected
  • JPY: Jan Domestic Corporate Goods Index