:: Australian Dollar: The release of the RBA board minutes suggested just what the market had expected and in fact had already begun pricing in – interest rates are at normal levels. The document confirmed rates in Australia are likely to remain on hold triggering a drop in intraday trade to retest the 87 cent handle. Offshore markets attempted to take the AUD/USD back above 88 however strong resistance emerged and the combination of weaker than expected European data and positive news in the U.S send the AUD lower again. In a selling frenzy late in the session the Aussie dollar hit a low of 0.8620 (at the time of writing) as a test of the psychological 85 cent mark looms near. Today’s Australian economic data releases in the form of May Consumer Confidence and first quarter Wage Cost Index data could provide some support for the local unit in intraday trade.

- We expect a range today in the AUD/USD rate of 0.8550 to 0.8675

:: Great Britain Pound: The Pound Sterling is fast approaching a retest of its May 17 lows of 1.4250 opening this morning at 1.4280 against the Greenback. Higher than expected Consumer and Retail Prices did give the GBP a boost in early London exchange taking it from 1.4415 to 1.4500 before sellers stepped in once again to pummel the Cable amidst persistent fears across the European region. Despite the move lower the GBP/AUD cross rate gained ground, bouncing from 1.6470 to 1.6600 following a large drop in the Aussie dollar.

- We expect a range today in the GBP/AUD rate of 1.6450 to 1.6650

:: New Zealand Dollar: The Kiwi sold off in Asia yesterday along with the Aussie dollar as risk aversion continued its recent stranglehold on markets. In New Zealand economic data released first quarter producer prices showed an increase however current levels do not seem to warrant immediate action by the RBNZ hence the expectation of rate rises was watered down somewhat adding to the weakening NZD. After finding some support at 0.6940 the NZD/USD rallied overnight climbing back above the psychological 70 cent barrier before peeling off once again to settle around 0.6950 in U.S trade. In a late flurry of activity the Kiwi once again sold off and opens this morning on its lows marginally below 69 cents.

- We expect a range today in the NZD/USD rate of 0.6850 to 0.6950

:: Majors: In what has been a similar theme of late risk aversion has seen commodities and equities continued their recent sell off overnight dragging the Euro lower. In economic data released overnight a slightly lower than forecast reading for Euro-zone sentiment, as measured by the ZEW institutes survey, also added to the downside momentum. With inflation in the region rising to a 16 month high there appear some troublesome times on the horizon as the ECB is an a position whereby raising rates to halt further price rises would further dampen prospects for economic growth. In U.S trade EUR/USD fell back below 1.2300 an opens this morning on its lows fractionally below 1.2200 following more demand for the Greenback as a consequence of strong North American Housing Starts. A decline in headline wholesale inflation stateside, as measured by the April PPI data was seen as a positive for the economy with the recovery yet to filter through to higher prices. The news is likely to extend the markets expectations of the timing for a rate rise by the FED which, in usual circumstances, would have seen the Greenback weaken however the broader overriding picture continues to support a firming USD against the EUR. In trade with the JPY however the big dollar slid lower from 93 to open this morning on its lows at 92.10 with Japanese Industrial Production scheduled for release in Asia today expected to add support to the Yen.

:: Data Releases: AUD: May WBC Consumer Confidence & Q1 Wage Cost Index NZD: No Data Expected Today USD: Apr CPI & FOMC Minutes GBP: BOE Minutes EUR: Mar Construction Output JPY: Mar Industrial Production & Mar Capacity Utilization