:: Australian Dollar: The Aussie failed to hold on to the 89 cent level in early morning trade yesterday declining steadily throughout the Asian session to enter offshore exchange around 0.8840 against the Greenback. With no meaningful economic data released overnight price action on the AUD/USD was relatively subdued with a rather tight 0.8870 to 0.8805 trading range. Demand for U.S dollars continued across the board as investors look towards 2010 with a level of optimism surrounding the U.S economy, in essence betting on a possible build up of inflationary pressures in the New Year and consequently a higher Greenback.

- We expect a range today in the AUD/USD rate of 0.8775 to 0.8850

:: Great Britain Pound: Resistance above 1.6150 held firm in Asia yesterday as the Pound Sterling slid lower in overnight exchange against the Greenback. A report from leading business group the Confederation of British Industry, otherwise known as CBI, believes the U.K economic recovery will be slower than the government predicts. The main driver of the GBP/USD rate however was persistent demand for the Greenback against the majors and nervousness surrounding this evening's third quarter U.K GDP data. This morning sees the Sterling open on its lows at 1.6040 against the Greenback and at 1.8200 Australian dollars.

- We expect a range today in the GBP/AUD rate of 1.8125 to 1.8250

:: New Zealand Dollar: With demand for U.S dollars continuing to emanate throughout the currency markets the Kiwi drifted lower from yesterday's Asian close around 0.7090 to open this morning near its low at 0.7050. In the absence of any economic data overnight it was a rally in U.S equities and an increase in demand for U.S treasuries that sparked the move with today's third quarter N.Z Current Account Balance sure to spark some more volatility in the NZD.

- We expect a range today in the NZD/USD rate of 0.7000 to 0.7085

:: Majors: A better than expected Japanese Trade Surplus, thanks mainly to an increase in exports throughout the broader Asian region, added some support to the Yen during the Asian afternoon trading session. Support on USD/JPY above the 90 handle held firm however, trading within a narrow band between 90.30 and 90.60 during the European session. With no Euro-zone or U.S economic data released overnight it was a shift in the U.S treasury yield curve, in particular an increase in the difference between 2 and 10 year note yields, and a rally in North American equities that triggered another round of Greenback buying. With interest rate markets rallying investors scurried to the big dollar as USD/JPY broke through resistance at 0.9060 to exchange above 91 for the first time since November 4. It opens this morning near its highs at 91.15 against the Yen, while the U.S dollar retreated from its overnight lows at 1.4370 against the Euro to exchange near its highs at 1.4288 in early morning trade.

:: Data Releases:

  • AUD: Oct Conference Board Leading Index
  • NZD: Q3 Current Account Balance
  • USD: Q3 Personal Consumption, Dec Richmond Fed Manufacturing Index & Q3 Final GDP Revision
  • GBP: Q3 GDP & Q3 Current Account
  • EUR: German Jan GfK Consumer Confidence & French Nov Producer Prices
  • JPY: BoJ Governor speech
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