Australian Dollar: The Australian Dollar opens on Tuesday at 0.8610. In early domestic trade yesterday, the Aussie moved swiftly beneath US86 cents as local equities opened under pressure after a soft lead from Wall Street last Friday. Given the recent rapid rise of the Australian Dollar, part of the move back down can be attributed to profit taking after a sustained period of one-way price action. During overnight trade, the unit moved between a low of 0.8543 and a high of 0.8630. Today sees the release of this month's RBA board minutes where the risk for the currency is some hosing down of the prospects of a near-term hike in interest rates.

- We expect a range today in the AUD/USD rate of 0.8580 to 0.8680

Great Britain Pound: Pound Sterling opens lower on Tuesday at 1.6565 against the U.S. Dollar after a UK report predicted the housing slump is likely to resume next year due to the continuing squeeze on mortgage lending. The pound retreated from yesterday's five-week high of 1.6741 and hit an overnight low of 1.6520. Whilst the pound is up around 13 per cent against the greenback in 2009, it continues to be outperformed by its antipodean rivals and opens today at 1.9200 against the Australian Dollar and 2.3620 against the New Zealand Dollar.

- We expect a range today in the GBP/AUD rate of 1.9150 to 1.9320

New Zealand Dollar: The New Zealand Dollar opens lower today against its US counterpart at 0.7000. A surprise fall in the Retail Sales had the market dumping the high yielding New Zealand dollar in favour of a return to the big dollar. The result came in at negative 0.5% compared with a previous reading of positive 0.4% as the Kiwi consumer resisted the urge to spend in the month of July. In other data, the REINZ House Sales index reported an increase from the previous month of 5% to 39% indicating a turnaround in the domestic housing market. Over the last 24 hours, the kiwi has traded between a low of 0.6962 and a high of 0.7060.

- We expect a range today in the NZD/USD rate of 0.6940 to 0.7045

Majors: Greenback weakness across the board continued overnight as record low borrowing costs in the United States has encouraged investors to sell dollars and buy high-yielding assets outside the U.S. The Euro hit a nine-month high overnight of 1.4651 whilst the big dollar has steadied against the Japanese Yen and is currently trading at 90.80. Market participants have formed the view that using the world's main reserve currency to fund carry trades is more profitable and less risky at the moment compared to using the Japanese Yen. Meanwhile, the Canadian Dollar (1.0820) is weaker today after the price of oil moved lower overnight.

Data Releases:

  • AUD: RBA Board Minutes, Sept
  • CAD: New motor vehicle sales, July; Labour Productivity, Q2
  • EUR: Labour costs, Q2; German ZEW Survey of economic sentiment, Sept
  • GBP: CPI, August
  • JPY: Machine Tool Orders, August
  • NZD: Manufacturing Activity, Q2
  • USD: Business Inventories, July; PPI, Advanced retail sales, August; Empire Manufacturing, Sept

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