:: Australian Dollar: With a distinct lack of any local economic data the Aussie dollar traded within a narrow band bouncing between 0.8670 and 0.8770 over the last 24 hours. With concern over the European banking system persisting equity markets and commodity prices have declined in recent days putting a lid on the AUD/USD exchange rate. Overnight the main highlight was the U.S Federal Reserve bank meeting with interest rates and the policy wording both remaining unchanged. The Central bank maintained the lower rates for “an extended period” mantra with the initial reaction triggering a short lived spike in the AUD from 0.8740 to 0.8775 before settling back at this morning’s open of 0.8740. Today sees the release of the conference board leading index which forecasts short to medium term growth prospects for the Australian economy with an increase from the previous months 0.3% result likely to add some short term support to the Aussie dollar

- We expect a range today in the AUD/USD rate of 0.8670 to 0.8770

:: Great Britain Pound: The Pound Sterling broke through short term technical resistance at 1.4850 overnight opening on its highs at 1.4965 against the Greenback this morning. The main catalyst for the move higher was the release of the Bank of England Minutes to the meeting that concluded on June 10 with one member, Andrew Sentance voting in favour of an increase in interest rates. Adding to the rally was a better than forecast survey of retailers and wholesalers as measured by the CBI Realised Sales. The GBP/AUD cross opens this morning at 1.7110, up marginally from yesterdays Asian close of 1.7050.

- We expect a range today in the GBP/AUD rate of 1.70 to 1.72

:: New Zealand Dollar: The New Zealand Dollar opens above the 71 cents handle this morning on the back of some weak US data. In offshore trade the Kiwi moved between 0.7025 and 0.7060 as a weaker than expected reading in US New Home Sales and the decision by the F.O.M.C. to leave rates on hold at 0.25% benefited high yielding currencies. Yesterdays release of the NZ Current Account was Kiwi supportive and saw the number come in with a surplus of NZD0.18 Billion compared with a previous reading of negative NZD3.4 billion. Against the Australian Dollar the Kiwi has opened marginally weaker and is changing hands at 1.2256.

- We expect a range today in the NZD/USD rate of 0.7080 to 0.7180

:: Majors: As expected the Federal Open Market Committee left interest rates on hold at 0.25% and delivered dovish statement on the state of the economy which in turn saw the Greenback being sold down against a basket of currencies. In the statement the Fed indicated that the local growth story was “proceeding” and the labour market is gradually improving but unemployment remains high. The greenback fell below the 90 against the Japanese Yen and hit 1.2350 against the EURO. Adding to the big dollars sell off last night was the release of New Home Sales for the month of May. The figure dropped by almost 33% to 300,000 units (from previous of 446,000 units), its lowest reading since 1963 as the Tax Credit Programme came to an end for people looking to purchase or build their first home. The market is now expecting that interest rates in the US will not likely change until very late 2010 or early 2011. Across the Atlantic, German and European flash Services and Manufacturing PMI data came in mixed and saw the EURO touch a low of 1.2220 before it moved slow and steadily up towards the 1.23 level.

:: Data Releases:

AUD: CB Leading Index CAD: No data slated for release EUR: EURO Industrial New Orders GBP: No data slated for release JPY: Trade Balance NZD: GDP Quarter on Quarter USD: Durable Goods Orders and Unemployment Claims

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