:: Australian Dollar: The Aussie sold off in Asia yesterday following some weaker than expected Japanese data and general risk aversion. After opening the session above the 87 cent handle support gave way in afternoon exchange with the AUD/USD entering offshore on its lows at 0.8625. Fear that some European banks may have to roll over debt obligations with the ECB increased perceived risk on equities, commodities and the AUD with the local currency collapsing quickly to exchange below 85 cents to open this morning at 0.8480. The AUD/USD is likely to be sensitive to any negative news with today’s HIA New Home Sales data to come under the microscope more than what it would normally in light of current market conditions.

- We expect a range today in the AUD/USD rate of 0.8420 to 0.8520

:: Great Britain Pound: In what can be considered a strong performance overnight the Cable held relatively firm to open this morning relatively unchanged from yesterday’s Asian close at 1.5060. Despite a massive move into the Greenback against most majors Pound Sterling stuck solid with some support coming from stronger than expected lending and credit data released overnight. It will be interesting to see if it can remain supported over the next 24 hours with several key U.K and European releases expected to have the important 1.5 level tested at some point. A massive drop in the Australian dollar overnight sees the GBP/AUD cross rate open substantially higher at 1.775 this morning, 2.5% higher than the same time yesterday.

- We expect a range today in the GBP/AUD rate of 1.7625 to 1.7800

:: New Zealand Dollar: A large 9.6% drop in N.Z Building permits during the month of May instigated some early morning selling in the Kiwi dollar yesterday, a move that was exacerbated by negative sentiment in Japan, Europe and the U.S. After exchanging around 0.7080 prior to the announcement the NZD/USD opens this morning at 0.6920 with concerns about European debt and U.S Consumer Confidence triggering some large selling. Despite the move lower on NZD/USD the Kiwi dollar strengthened against the Aussie dollar putting the AUD/NZD cross rate lower this morning at 1.2250.

- We expect a range today in the NZD/USD rate of 0.6885 to 0.6985

:: Majors: Japanese economic data released yesterday disappointed the market with the unemployment rate increasing to 5.2% and Industrial Production falling 0.1% compared to the previous months 1.3% rise. On a positive note however the job to applicant ratio increased indicating there was an increase in positions available hence strengthening the JPY against the USD in local trade to finish in Asia at 88.80. EUR/USD was sold off during European trade as the July 1 deadline for bank loan repayments to the ECB, a total of 442 billion EUR, looms near. With the market nervous that some banks may not be in a position to repay and will ask for loans to be rolled over risk aversion drove the Euro and “riskier assets” lower. The flight to safety saw EUR/USD hit a low of 1.2150 and USD/JPY 88.25 before both bounced back slightly during the North American afternoon to open this morning in Asia at 1.2180 and 88.55 respectively. Adding to the fears was a much lower than forecast U.S consumer confidence reading with the sentiment survey dropping from 62.7 to 52.9 in June, well below economist forecasts for only a moderate adjustment to 62.5. With U.S consumers less confident about the outlook for employment and wages the Dow Jones Industrial Average closed down 2.65% after having at one stage being 3.3% in the red. Heading into this evenings ECB announcement currency markets will remain volatile with 1.2150 support on EUR/USD likely to be tested once again.

:: Data Releases: AUD: May HIA New Home Sales, Jun DEWR Skilled Vacancies & May Private Sector Credit NZD: No Data Expected Today USD: Jun ADP Employment Change, Jun Chicago PMI & Fedspeak GBP: Jun GfK Consumer Confidence, Jun Nationwide House Prices, & Q1 GDP EUR: Jun German Unemployment Change, Jun Eurozone CPI Estimate & Trichet Speach JPY: May Housing Starts & May Construction Orders