:: Australian Dollar: The Aussie opens today lower at 0.8700 against the Greenback as mixed signals on the US housing front overnight cast shadows over the US economy in the lead up to the U.S. Federal Reserve’s latest announcements tonight. After initially rising to 0.8830 US yesterday during Asia the Aussie fell as China’s Yuan declined on prospects the nation’s central bank will move to limit gains after dropping a two-year peg to the dollar. Offshore the Aussie was unable to muster much of a rally as traders remain wary despite the positive news flow from Germany and the UK.

- We expect a range today in the AUD/USD rate of 0.8675 to 0.8780

:: Great Britain Pound: Offshore in the lead up to the UK’s annual budget, which has been described as ‘the emergency budget and unavoidable’ by Chancellor of the Exchequer George Osborne, the sterling rose more than 1% on a vote of confidence by investors in the sweeping austerity measures being taken in the UK. The tight budget has eased concerns the UK would struggle to narrow its deficit, risking its AAA credit rating. The Sterling broke above 1.4850 against the Greenback after US housing figures missed their mark. This morning the Pound opens buying 1.4810 US Dollars ahead of today’s Bank of England minutes. Meanwhile, the pound opens higher against both the Australian Dollar (1.6960) and the New Zealand Dollar (2.1000).

- We expect a range today in the GBP/AUD rate of 1.6910 to 1.7000

:: New Zealand Dollar: The Kiwi reaching an intra-day high of almost 0.7120 US during early Asia before falling back to around 0.7080 US despite credit card spending increasing 3.4% from the previous year. The Kiwi fell despite Chinese authorities making good on their promise to loosen the peg, the Yuan hitting a five year high of 6.7930, on prospects the Chinese Central Bank may move to limit gains in the Yuan. The Kiwi opens lower for the second day at 0.7030 versus the Greenback as global stock markets declined reducing appetite for commodity-linked currencies.

- We expect a range today in the NZD/USD rate of 0.7000 to 0.7100

:: Majors: The Yen rallied against the US Dollar reaching 90.32 offshore after European Central Bank governing council member Christian Noyer said some banks in the euro region will struggle to raise money, potentially dampening global growth. Furthering the Yen’s gains, US housing data unexpectedly fell inducing investors to find refuge in Japan’s currency. On the Euro front the currency fell to 1.2250 US Dollars despite German IFO business climate data exceeding expectations improving to 101.8 from 101.5 from the previous month. Germany also revealed their budget deficit this year will be cut by 20 Billion Euros because of higher taxes and smaller costs for unemployment benefits. The Euro found itself limited around 1.2300 US as investors traded cautiously.

:: Data Releases: AUD: No data today CAD: No data today EUR: German & EZ PMI, June GBP: Banbk of England minutes JPY: No data today NZD: Current Account, Q1 USD: FOMC Meeting

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