:: Australian Dollar: Consumer sentiment in Australia markedly improved rising to 11.1% the most in 13 months, following 3 months of decline. The Australian Dollar reached 2 month highs breaking past 0.8850 to touch 0.8870 against the Greenback offshore as investors grew hungry for riskier assets following gains in US stocks. Enthusiasm subsided following the release of the US Federal Reserve's minutes which revealed downward revisions for growth. The Australian Dollar opens trade today at 0.8836 USD ahead of MI inflation expectations and motor vehicle sales.

- We expect a range today in the AUD/USD rate of 0.8770 to 0.8870

:: Great Britain Pound: Overnight the Pound climbed to its highest level against the US Dollar in over 2 months, just missing 1.5300 against the US dollar after unemployment declined more than expected. The number of claimants fell by 20,800 exceeding expectations of a 20,100 drop. This would make June the fifth consecutive month of declines in jobless claims, boosting speculation the economy may continue to strengthen as the government cuts spending. Combined with inflationary pressures, these bullish labour results should serve as a strong support for the more hawkish members of the Monetary Policy Committee. This morning the Sterling opens buying 1.5265 US and 1.7258 Aussie.

- We expect a range today in the GBP/AUD rate of 1.7150 to 1.7350

:: New Zealand Dollar: The Kiwi pared its losses offshore after softer NZ retail sales figures initially weighed down on the New Zealand Dollar. Core retail sales disappointed the market, which expected a 0.6% increase, declining 0.2% for April. Investor risk appetite improved offshore following gains in US equities which saw the Kiwi break 0.7250 US hitting a 2 month high. Underperforming US retail sales and a downward revision for growth by the US Fed pulled the Kiwi back, opening at 0.7233 USD this morning.

- We expect a range today in the NZD/USD rate of 0.7150 to 0.7250

:: Majors: The Euro spent much of its time trading tightly between 1.2695-1.2730 US price channel. Core consumer price index in the European Monetary Union printed according to expectations of 0.9%, doing little to inspire strength. Industrial Manufacturing in the region missed expectations slightly but stayed rather consistent at 0.9% growth. The euro climbed to more than a 2-month high of 1.2779 versus the US dollar from early low offshore of 1.2684 as U.S. stocks fluctuated amid speculation whether corporate profits will be strong enough to sustain the U.S. economic recovery. Hopes were soon dashed as risk aversion returned to the market as Federal Reserve minutes indicated increased risk to the economic recovery, discouraging investors from the riskier assets. The Yen advanced as investors sought safe havens in the aftermath. This morning the Euro and Yen open at 1.2739 and 88.25 US respectively.

:: Data Releases:

  • AUD: New Motor Vehicle Sales
  • CAD: No data slated for release
  • EUR: ECB Monthly Bulletin
  • GBP: Housing Equity Withdrawl Q/Q; MPC Members Miles speaks
  • JPY: BOJ Official Cash Rate Decision and Monetray Policy Statement
  • NZD: Business Manufacturing Index
  • USD: PPI m/m; Unemployment Claims; Empire State Manufacturing Index

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