:: Australian Dollar: The much anticipated third quarter Australian GDP figure surprised the market yesterday rising by a less than expected 0.2%. Leading into the announcement the Aussie dollar had been exchanging around 0.9060 before beginning its decline that saw an overnight low near 0.8950. This morning sees the AUD open on the 90 cent handle after a surprisingly subdued U.S trading session with investors looking towards today's November HIA New Home Sales for some direction on the state of the local housing market. On balance this week's two main events, the RBA board minutes and the GDP data, are likely to hamper any attempts at a major rally this week with resistance around 92 cents likely to prove too difficult to break at this stage and support at 89 cents a possibility.

- We expect a range today in the AUD/USD rate of 0.8950 to 0.9040

:: Great Britain Pound: The Pound Sterling received a massive boost overnight with the announcement of the first monthly drop in the number of U.K jobless claims since February 2008. Analysts had forecast an increase of around 12,500 jobless claims in November with the 6,300 drop triggering a rally in the GBP/USD rate from 1.6240 to an eventual high above 1.6400. This morning sees the Pound Sterling exchanging at 1.6330 and 1.8125 against the Greenback and Aussie dollars respectively with the move higher in the GBP/AUD cross rate aided by a weaker AUD.

- We expect a range today in the GBP/AUD rate of 1.8080 to 1.8220

:: New Zealand Dollar: The Kiwi opens this morning at 0.7205, marginally higher than yesterday's Asian close around 0.7180. An initial weakening in the Greenback during European trade helped the Kiwi to an overnight high around 0.7220. With no local economic data for direction the NZD was dictated by offshore news and events as U.S data took the limelight once again. The U. S Federal Reserve Bank maintained its exceptionally low rates for an extended period stance following the conclusion of its meeting and with headline inflation data out of North America coming in on expectations there was little change on the currency front. The main focus in local trade today is the release of the December NBNZ business confidence survey with an upbeat result likely to see further downside on the AUD/NZD cross rate which is exchanging lower this morning at 1.2485.

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

:: Majors: The Greenback opens relatively unchanged against the Euro exchanging at 1.4520 whilst in trade with the Yen it is slightly higher at 89.85. Headline U.S CPI data came in right on expectations, increasing from 0.3% to 0.4% during the month of November however it was the core component which excludes food and energy costs that surprised the market somewhat recording its first flat result in 10 months. The main attraction overnight was the conclusion of the FOMC meeting where as predicted the central bank kept interest rates on hold at record lows and re-iterated that rates would remain exceptionally low for an extended period. In Asia today the USD/JPY will come under more scrutiny with the Bank of Japan concluding its meeting and despite rates expected to remain on hold at 0.1% the accompanying rhetoric may see a spike in currency volatility.

:: Data Releases:

  • AUD: Nov HIA New Home Sales
  • NZD: Dec NBNZ Business Confidence
  • USD: Jobless Claims, Nov Leading Indicators & Dec Philadelphia Fed
  • GBP: Nov Retail Sales
  • EUR: Oct Construction Output
  • JPY: BoJ Rate Decision
United kingdom