Money and Forex Blog

:: Australian Dollar: Early yesterday it appeared as though we were in for another quiet Asian session with the AUD/USD sitting contently within a 25 pip range for the majority of the day. The release of local data had no apparent impact, and despite an increase of 0.8% in the CB Leading Index the market was content in consolidating recent gains. The USD remained under pressure however and the Aussie soon found some momentum from bullish movement in precious metals markets and speculation of October cash rate hikes. Racing through what was expected to have been some form of resistance at 0.9700 the Australian Dollar entered off-shore trade just shy of 0.9730. Some mild profit-taking and mixed opinions over stimulus measures within the Fed saw a drop back below 97 cents, as the currency pair also awaits the US House of Representative's vote on the China trade sanctions bill. The passing of this bill is aimed at restricting low currency valuations in order to support exporters which is currently hurting U.S exports. Opening today around 0.9690 this morning's economic calendar brings data on local Building Approvals, Private Sector Credit and the RBA's Financial Stability review. Upside resistance has proven to be at 0.9730 and support lies at 0.9670.

- We expect a range today in the AUD/USD rate of 0.9650 to 0.9725

:: Great Britain Pound: Pound Sterling traded steadily in the right direction against the Greenback during yesterday's Asian session, moving from 1.5800 through to test key resistance levels at 1.5850 and reach highs near 1.5860 by the beginning of European trade. Resistance proved too much however and a sharp reversal sent the Pound back to 1.5810, with a mixed bag of local data failing to give the struggling currency any support. Quickly losing momentum Sterling needs new reason to push higher and investors will be watching the release of Consumer Confidence figures being released early this morning as well as the Nationwide house Price Index due early London hours. GBP/USD opens today back below 1.5800 currently trading between 1.5780/90. Also lower against the Australian dollar after falling below 1.6300 overnight we currently sit right on the 1.63 handle with early morning N.Z data releases taking the Pound is higher against the Kiwi this morning at 2.1470.

- We expect a range today in the GBP/AUD rate of 1.6250 to 1.6400

:: New Zealand Dollar: The New Zealand Dollar also spent yesterday's Asian session consolidating recent gains trading just below 74 cents. Capitalising on some momentary USD weakness, some orders managed to push the Kiwi briefly above 0.7400 with European trade seeing several unsuccessful attempts to push any higher. Proving too much in the end the NZD retreated quite rapidly back to test support levels around 0.7360 although attempting to recover these losses we begin today with the release of NZ Building Consents which have just been announced at a drop of 17.8%. An immediate drop was seen from 0.7370 to 0.7345 and we are currently trading at 0.7350. Today's session will also bring the release of National Bank of New Zealand's Business Confidence survey with this statistic holding quite a high degree of market influence. Against its antipodean counterpart, the Kiwi is also suffering with the Aussie forging new highs above 1.3150 which were only seen briefly back in April this year.

- We expect a range today in the NZD/USD rate of 0.7225 to 0.7325

:: Majors: EUR/USD saw little movement early on yesterday, trading between 1.3565 and 1.3595. An increase in French Consumer confidence helped push the single currency through 1.3600 for the first time since April this year and backed by some large orders it managed to stage a rally to new highs just below 1.3650. Continuing to weigh on the currency however is Portuguese and Irish debt worries, and this evening also brings the release of German unemployment figures and CPI estimates for EU member states. The Euro opens today trading at 1.3620. The Yen was one of the few currencies that made a move during Asia yesterday, gaining further ground against a suffering US Dollar and trading down to 83.62 as a strong September Tankan Index showed the highest reading since March 2003. Entering offshore trade just above 83.50 the Greenback attempted to recapture some of these losses however the pair have held solidly below 84.00. Entering Asia this morning at 83.75, investors await Japanese Preliminary Industrial Production and Retail Sales figures due out this morning.

:: Data Releases:

• AUD: Aug Building Approvals, Aug Private Sector Credit & RBA Financial Stability Review
• NZD: Sep NBNZ Business Confidence
• USD: Q2 GDP Revision, Q2 PCE, Sep Chicago Purchasing Manager & Weekly jobless claims
• GBP: Sep Nationwide House Prices
• EUR: Sep CPI & German Sep Employment
• JPY: Aug Retail Trade, Aug Industrial Production, Aug Housing Starts & Aug Construction Orders

:: Australian Dollar: Early yesterday it appeared as though we were in for another quiet Asian session with the AUD/USD sitting contently within a 25 pip range for the majority of the day. The release of local data had no apparent impact, and despite an increase of 0.8% in the CB Leading Index the market was content in consolidating recent gains. The USD remained under pressure however and the Aussie soon found some momentum from bullish movement in precious metals markets and speculation of October cash rate hikes. Racing through what was expected to have been some form of resistance at 0.9700 the Australian Dollar entered off-shore trade just shy of 0.9730. Some mild profit-taking and mixed opinions over stimulus measures within the Fed saw a drop back below 97 cents, as the currency pair also awaits the US House of Representative's vote on the China trade sanctions bill. The passing of this bill is aimed at restricting low currency valuations in order to support exporters which is currently hurting U.S exports. Opening today around 0.9690 this morning's economic calendar brings data on local Building Approvals, Private Sector Credit and the RBA's Financial Stability review. Upside resistance has proven to be at 0.9730 and support lies at 0.9670.

- We expect a range today in the AUD/USD rate of 0.9650 to 0.9725

:: Great Britain Pound: Pound Sterling traded steadily in the right direction against the Greenback during yesterday's Asian session, moving from 1.5800 through to test key resistance levels at 1.5850 and reach highs near 1.5860 by the beginning of European trade. Resistance proved too much however and a sharp reversal sent the Pound back to 1.5810, with a mixed bag of local data failing to give the struggling currency any support. Quickly losing momentum Sterling needs new reason to push higher and investors will be watching the release of Consumer Confidence figures being released early this morning as well as the Nationwide house Price Index due early London hours. GBP/USD opens today back below 1.5800 currently trading between 1.5780/90. Also lower against the Australian dollar after falling below 1.6300 overnight we currently sit right on the 1.63 handle with early morning N.Z data releases taking the Pound is higher against the Kiwi this morning at 2.1470.

- We expect a range today in the GBP/AUD rate of 1.6250 to 1.6400

:: New Zealand Dollar: The New Zealand Dollar also spent yesterday's Asian session consolidating recent gains trading just below 74 cents. Capitalising on some momentary USD weakness, some orders managed to push the Kiwi briefly above 0.7400 with European trade seeing several unsuccessful attempts to push any higher. Proving too much in the end the NZD retreated quite rapidly back to test support levels around 0.7360 although attempting to recover these losses we begin today with the release of NZ Building Consents which have just been announced at a drop of 17.8%. An immediate drop was seen from 0.7370 to 0.7345 and we are currently trading at 0.7350. Today's session will also bring the release of National Bank of New Zealand's Business Confidence survey with this statistic holding quite a high degree of market influence. Against its antipodean counterpart, the Kiwi is also suffering with the Aussie forging new highs above 1.3150 which were only seen briefly back in April this year.

- We expect a range today in the NZD/USD rate of 0.7225 to 0.7325

:: Majors: EUR/USD saw little movement early on yesterday, trading between 1.3565 and 1.3595. An increase in French Consumer confidence helped push the single currency through 1.3600 for the first time since April this year and backed by some large orders it managed to stage a rally to new highs just below 1.3650. Continuing to weigh on the currency however is Portuguese and Irish debt worries, and this evening also brings the release of German unemployment figures and CPI estimates for EU member states. The Euro opens today trading at 1.3620. The Yen was one of the few currencies that made a move during Asia yesterday, gaining further ground against a suffering US Dollar and trading down to 83.62 as a strong September Tankan Index showed the highest reading since March 2003. Entering offshore trade just above 83.50 the Greenback attempted to recapture some of these losses however the pair have held solidly below 84.00. Entering Asia this morning at 83.75, investors await Japanese Preliminary Industrial Production and Retail Sales figures due out this morning.

:: Data Releases:

• AUD: Aug Building Approvals, Aug Private Sector Credit & RBA Financial Stability Review
• NZD: Sep NBNZ Business Confidence
• USD: Q2 GDP Revision, Q2 PCE, Sep Chicago Purchasing Manager & Weekly jobless claims
• GBP: Sep Nationwide House Prices
• EUR: Sep CPI & German Sep Employment
• JPY: Aug Retail Trade, Aug Industrial Production, Aug Housing Starts & Aug Construction Orders

:: Australian Dollar: Last week saw a solid performance from the Australian Dollar, gaining approximately 2.5% in value against the Greenback and closing higher yet again on Friday. Rallying from a session low of 0.9461, the week''s bullish momentum continued throughout Asian and European trade as investors remain confident in the RBAs hawkish outlook and the general state of the Australian economy. The AUD pushed back through 0.9500 where some resistance was met temporarily, but it was not to be deterred as we saw another solid rally to 0.9550 during London hours. It was comments by Fed Chairman Bernanke and the release of the US Core Durable Goods that provided the ultimate catalyst to buoy the currency pair to retest 96 cents for the second time in a week. The Aussie held up well opening this morning hovering around the 96 cent handle with the focus on Asia today likely to be BoJ Governor Shirakawa's talks with business leaders in Osaka and the direction of the USD/JPY.

- We expect a range today in the AUD/USD rate of 0.9550 to 0.9650

:: Great Britain Pound: Fridays markets saw considerable appetite for risk and the Pound certainly benefited from this. A better than expected index for the German Ifo Business Climate supported the currency during the European morning with a steady rally from 1.5640 through 1.5700 to settle comfortably around 1.5720 mid-session. The aforementioned US Core Durable Goods release saw the Pound push higher taking out 1.5800 and closing the week at the highest levels seen since early August, just shy of 1.5830. We open this morning unchanged and with a lack of economic news today the markets will be awaiting Tuesday's Current Account data and Final GDP q/q to see if the current gains can be held onto. Still being outperformed by the Australian dollar we see Sterling open lower this morning at 1.6450, and also against the Kiwi opening at 2.1490..

- We expect a range today in the GBP/AUD rate of 1.6400 to 1.6525

:: New Zealand Dollar: After falling from highs above 0.74 cents last week following disappointing GDP figures, the New Zealand Dollar attempted to recover some of these losses on Friday. Falling back on its label as a risky asset it moved from 0.7271 to test 0.7360 resistance during the European and North American sessions, though the gains remain muted as the market remains concerned about the country's economic growth. Opening marginally higher today the Kiwi has spiked early to touch 0.7370 but fallen quickly back below 0.7360. Also a quiet beginning to the week concerning economic news for the country we are likely to see risk being the main indicator for the currency. Looking across the Tasman it has been choppy trade against the Australian dollar, opening at 0.7658 however the Australian dollar does look comfortable holding onto its recent gains.

- We expect a range today in the NZD/USD rate of 0.7315 to 0.7400

:: Majors: A slightly better than expected German IFO survey on the business climate provided some support for EUR/USD on Friday as it bounced from 1.3300 to finish the week on its highs near 1.3500. Comments from Fed Chairman Bernanke about the fragile state of the U.S economy sent the Greenback lower. Speaking at a conference at Princeton University about the central bank's recent actions he said they avoided "what could have been a global meltdown" by buying mortgage backed securities and treasuries which "additionally stimulate the economy". The dovish nature of the comments have many analysts predicting the Federal Reserve Bank may add additional stimulus sooner rather than later, boosting risk appetite and weakening the USD. Equity markets seemingly ignored a weaker than forecast -1.3% result on headline Durable Goods orders rallying instead on the open with the core result which excludes transportation rebounding from -2.8% to +2% in August. In other news rumours that the BoJ intervened to buy USD/JPY on Friday sent the currency pair up in late Asia on Friday jumping from 84.50 to 85.40 however the move reversed quite quickly after the central bank declined to comment. Broad based U.S dollar weakness during Friday's offshore session saw USD/JPY finish the week around 84.20 near the lows of 84.10.

:: Data Releases:

• AUD: No Data Expected Today
• NZD: No Data Expected Today
• USD: Aug Chicago Fed National Activity index
• GBP: No Data Expected Today
• EUR: Sep Prelim German CPI, Oct GfK Consumer Confidence & Trichet Speaks
• JPY: Aug Trade Balance

:: Australian Dollar: The Australian Dollar held onto recent gains yesterday and traded quietly throughout the Asian session, hovering between 0.9530 and 0.9574. Soon after entering off-shore trade, a decrease in risk appetite caused the AUD to break the down-side of this range and it fell below 95 cents to test lows near 0.9465. Investor sentiment continued to steer the currency pair overnight as US Unemployment Claims unexpectedly increased 12K to 465K, with a brief rally back above 0.9500 after it was announced US existing home sales increased more than expected to an annualized 4.13M. Opening today lower at 0.9485 the Aussie is likely to maintain a cautious approach as markets look to whether the upcoming US Durable Goods Orders will weigh further on risk appetite.

- We expect a range today in the AUD/USD rate of 0.9450 to 0.9550

:: Great Britain Pound: A quiet day was seen by most currencies yesterday with most volatility occurring during the European and North American sessions. Sterling entered the day in London unchanged at 1.5655 and despite a decrease in Mortgage approvals managed to stage a rally above 1.5730, touching levels not seen since mid-August. Unable to hold onto these gains, Cable fell back below 1.57 as a decrease in market sentiment helped boost the US Dollar and the pair is currently settling around 1.5680. Opening today stronger against the Aussie and the Kiwi, the Pound appears more supported by risk aversion rather than inherent strength.

- We expect a range today in the GBP/AUD rate of 1.6450 to 1.6600

:: New Zealand Dollar: It appeared as though the Kiwi would retest the 74 cent handle in early trade yesterday ahead of the all important N.Z Q2 GDP result with economists forecasting a rise in economic growth from 0.6% in Q1. The market was shocked however to learn that GDP not only fell to 0.2% but that the previous quarters number was revised down to 0.5%. The news sent the NZD/USD lower immediately falling to an intraday low of 0.7305. European markets continued the theme with the Greenback strength and Euro weakness dragging the Kiwi to an eventual low just shy of 0.7250. Despite a subsequent rally and retest of 0.7330 during North American exchange NZD/USD opens this morning at 0.7285 whilst the AUD/NZD cross rate is down from its early European peak of 1.3080 exchanging at 1.3015.

- We expect a range today in the NZD/USD rate of 0.7225 to 0.7325

:: Majors: After hovering around the 1.34 handle against the Greenback in Asia yesterday the Euro fell during early offshore exchange following an unexpectedly low reading on business conditions. The Purchasing Managers Index survey, or PMI as it is known, showed a decline in both the services and manufacturing sectors across the Eurozone sparking some selling in EUR/USD which saw it retest 1.3300 overnight. In the U.S the news was mixed with weekly jobless claims rising above forecasts which continue to reinforce the likelihood of high unemployment for an extended period causing an initial weakening in the USD. The news however was balanced by a larger than forecast rise in existing home sales and an increase in the leading indicators composite index during August. This morning sees the big dollar exchanging at 1.3310 and 84.40 against the Euro and Yen respectively ahead of this evenings release of more U.S economic data in the form of August Durable Goods and New Home Sales.

:: Data Releases:

• AUD: No Data Expected Today
• NZD: No Data Expected Today
• USD: Aug Durable Goods & Aug New Home Sales
• GBP: No Data Expected Today
• EUR: Sep German IFO & Q2 French GDP
• JPY: No Data Expected Today

:: Australian Dollar: The AUD traded solidly throughout Asia yesterday consolidating stoically above 0.9550 for most of the day. The Greenback remained under pressure during the European session as the Bank of England joined the FOMC in the view further stimulus measures may be required and this aided the Australian dollar to test new resistance just below 96 cents. These levels were seen only briefly as it was announced U.S house prices dropped 0.5% from June (3.3% YoY), and AUD/USD quickly retraced all Asian gains to test support levels near 0.9510. Bouncing back, we start the day trading once again around 0.9550 and with no local data due for release we may be looking at a familiar range today.

- We expect a range today in the AUD/USD rate of 0.9525 to 0.9595

:: Great Britain Pound: The Pound benefited from an increase in risk appetite on Wednesday, rallying steadily towards 1.57 and entering London on a 3-day high. Following the release of the BOE's minutes, Sterling took a hit and tumbled to 1.5604, and after some choppy trade recovered to hold around 1.5650. With Andrew Sentance remaining the one lone hawk amongst a much more cautious Monetary Policy Committee, the currency is likely to remain weighed down against its major counterparts. The Pound begins the Asian session lower against the antipodean currencies, trading against the Aussie at 1.6380 and the Kiwi at 2.1210.

- We expect a range today in the GBP/AUD rate of 1.6350 to 1.6400

:: New Zealand Dollar: After several failed attempts the Kiwi finally took out stubborn resistance at 0.7350 to momentarily exchange above the 74 cent handle for the first time since January this year. Global investors ignored a turnaround in the Current Account balance during the second quarter of the year which moved from a surplus into deficit focusing instead on news in Europe and the U.S. This morning sees the NZD/USD open at 0.7385 ahead of the release of Q2 GDP data with economic growth in N.Z expected to have increased from 0.6% to 0.8%. Despite the increase analysts are somewhat less optimistic for third quarter growth so should a rally result from higher than expected numbers today the move is likely to be short lived during the Asian session.

- We expect a range today in the NZD/USD rate of 0.7350 to 0.7400

:: Majors: The recent rally in the Euro continued overnight pushing through August 6 highs of 1.3330 against the Greenback to trade above the 1.34 handle for the first time since April. Hot on the heels of the successful Irish bond auction the previous day demand for Portuguese bonds was 3.5 times oversubscribed as investors scrambled to purchase some of the 750 million EUR on offer at a yield of 4.7%. With the big dollar already on the back foot a 0.5% decline in the July House Price index kept a lid on any attempts at a recovery against the Euro and Yen. USD/JPY gave back the majority of the gains that followed Japanese currency intervention dropping back below 85 to an eventual overnight low around 84.25. Trading in Asia today is likely to be relatively subdued with both China and Japan having bank holidays before this evenings U.S weekly jobless claims which will give investors some further guidance as to the state of the North American employment market.

:: Data Releases:

• AUD: No data today
• CAD: No data today
• EUR: Euro Zone & German PMI, Sept
• GBP: BBA Loans for house purchase, Aug
• JPY: No data today
• NZD: GDP Q2
• USD: Initial jobless claims, Sept 18; Existing Home Sales, Aug

:: Australian Dollar: The Australian Dollar traded in a narrow range during Asia yesterday unaffected by the release of the RBA's minutes and entered London around what is becoming a familiar 0.9450 handle. Quiet trading continued throughout Europe as investors awaited the much anticipated Interest Rate announcement and accompanying FOMC Statement. Leaving interest rates on hold at 0.25% as expected, the US Federal Reserve recognised the sluggish economic recovery and indicated its willingness to increase quantative easing measures in order to keep long term interest rates under control, gradually return inflation to desired levels and support the job market. Along with an unexpected rise in US Housing Starts, Bernanke's comments kept investors happy and the AUD jumped 1 cent to a new high slightly above 0.9550. Consolidating around 0.9535 we look to a quiet day ahead on the news front with just the Melbourne Institute's Leading Index Data being released this morning.

- We expect a range today in the AUD/USD rate of 0.9485 to 0.9585

:: Great Britain Pound: A massive rise in U.K Public Sector Net Borrowing from 2 billion to 15.3 billion pounds saw GBP/USD initially fall from 1.5580 to test the 1.5500 level with support holding firm throughout the European session. The Pound came to life however during North American exchange rallying towards 1.5650 following the FOMC meeting and broad based USD weakness. This morning sees the GBP trading at 1.5605 and 1.6365 against the USD and AUD ahead of the release of the Bank of England Minutes this evening.

- We expect a range today in the GBP/AUD rate of 1.6320 to 1.6450

:: New Zealand Dollar: The Kiwi remained range bound in Asia yesterday bouncing between 0.7270 and 0.7290 for the majority of the trading day. The theme continued throughout the European session before jumping through resistance around the 73 cent handle to test the critical 0.7350 level on two occasions. The catalyst for the move higher was news that the U.S Federal Reserve Bank stands at the ready to expand QE in order to halt job losses and spur economic growth in the region. This morning sees the NZD/USD trading at around 0.7325 ahead of the release of second quarter N.Z Current Account data which is expected to show a turnaround from a surplus to a deficit.

- We expect a range today in the NZD/USD rate of 0.7275 to 0.7350

:: Majors: European investors breathed a sigh of relief overnight with the Irish bond auction five times oversubscribed at a slightly lower yield of 6.4%. There was some concern that the government would struggle to get the necessary refinancing however with demand strong the Euro firmed from 1.3060 to hover around 1.3130 for the majority of the European session. The big news overnight was the conclusion of the U.S Federal Reserve Bank meeting with the central bank using strong rhetoric in its accompanying statement. In particular the Fed said it was "prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate". A clear signal that it is ready to increase QE and that spurring high inflation as a consequence is not a concern. The news overshadowed U.S Housing data with the Greenback weakening immediately after the release falling to 1.3275 versus the Euro, its highest level since the 9th of August approaching important technical resistance at 1.3325. USD/JPY lost ground as well momentarily dipping back below the 85 handle to open this morning at 85.13 whilst EUR/USD opens at 1.3255.

:: Data Releases:

• AUD: Jul Leading Index
• NZD: Q2 Current Account
• USD: Jul House Price Index
• GBP: BoE Minutes
• EUR: Jul Industrial New Orders
• JPY: Jul All Industry Activity Index & BoJ Speak

:: Australian Dollar: The Aussie dollar held on to support around 0.9350 in Asia on Friday staging a rally during the afternoon session which saw it enter early London almost a cent higher near 0.9450. A report in a Chinese news paper, the Securities Daily pointing towards interest rate increases in order to curb rising domestic inflationary pressures spurred the rally. After momentarily exchanging above 0.9450 in European trade the AUD/USD subsequently lost ground following some less than inspiring U.S economic data to end the week back at 0.9375. Today the Aussie dollar is likely to take direction from comments by RBA governor Stevens who is talking on Monetary Policy at a luncheon in Shepparton Victoria. The comments will be closely scrutinised ahead of tomorrow's release of the central bank's board minutes which should provide some information as to the timeliness of the next Australian interest rate rise.

- We expect a range today in the AUD/USD rate of 0.9420 to 0.9500

:: Great Britain Pound: The Pound Sterling failed to hold on to early offshore gains shedding 150 points from its high of 1.5685 to trade at a low of 1.5535 overnight. Concerns about Ireland, Portugal and Greece ability to finance its debt obligations this week weighed on sentiment towards the Euro-zone taking the GBP/USD down with it. Adding to the selling was a drop in preliminary U.K Mortgage approvals as measured by the BoE comprised of data which showed a decline in new loan approvals from 47k to 45k. This morning sees the Pound open at 1.5550 and 1.6415 against the U.S and Australian dollars respectively.

- We expect a range today in the GBP/AUD rate of 1.6375 to 1.6475

:: New Zealand Dollar: The Kiwi rallied from 0.7250 in Asia yesterday to enter offshore pressing against the 73 cent level. Slightly better than expected second tier data out of N.Z helped however it was news across the Tasman that spurred the majority of the demand. The governor of the Australian central bank signalled an increased likelihood of another interest rate increase sighting heightened inflationary pressures as a concern. The comments increased demand for both the AUD and NZD against the USD with offshore markets eventually taking NZD/USD to a high of 0.7320 before settling around the 73 cent handle on the open. With the Aussie dollar continuing to rally the AUD/NZD cross rate touched 1.3 overnight for the first time since April with today's release of the RBA board minutes likely to add further support on the cross.

- We expect a range today in the NZD/USD rate of 0.7250 to 0.7325

:: Majors: The Euro rallied against the Greenback to exchange back above the 1.3100 handle during early European on the back some renewed optimism that a European sovereign default would be avoided. With concern over the weekend about the state of Ireland's finances comments from European Union economic and monetary commissioner Olli Rehn overnight that he was confident officials will "repair" the nation's financial system were positively received initially boosting the Euro. Investors took profit however and sold EUR/USD back down as yield spreads on bond markets widened to record levels ahead of this week's Irish, Greek and Portuguese debt auctions. Critical technical support ahead of 1.3020 held once again and the EUR/USD opens in Asia this morning at 1.3065 with all eyes now on this evenings U.S Federal Reserve Bank meeting. The Fed is expected to make no changes to policy and reiterate that high unemployment and low inflation warrant low interest rates for an "extended period". The market will however be anticipating any comments that may shed some more light on further QE measures and the possible timing of such moves. USD/JPY remains range bound seemingly comfortable bouncing between 85.25 and 85.95 for the time being however a break seems imminent and this evenings announcement could just the catalyst for another move higher.

:: Data Releases:

• AUD: RBA Board Minutes
• NZD: Aug Credit Card Spending
• USD: FOMC Meeting, Aug Building Permits and Aug Housing Starts
• GBP: Aug Public Sector Net Borrowing
• EUR: No data expected today
• JPY: Jul Leading Index

:: Australian Dollar: In the absence of any major economic data yesterday, the Australian Dollar spent most of the domestic session trading the range between 0.9350 and US94 cents. The Melbourne Institute survey of consumer inflationary expectations rose to 3.1 per cent in September from 2.8 per cent in August as labour market conditions continue to show signs of improvement. It was more of the same offshore with the Aussie hitting a high of 0.9390 on the back of stronger base metals prices. Gold is trading at another record high above US$1,274/ounce.

- We expect a range today in the AUD/USD rate of 0.9330 to 0.9410

:: Great Britain Pound: Pound Sterling opens little-changed against the greenback at 1.5617 and remains under pressure after UK retail sales unexpectedly fell last month. Sales in August fell 0.5 per cent from July heightening concerns that economic growth is slowing. The pound hit an overnight low of 1.5537 and plunged to a seven-week low against the Euro (0.8370). Also weighing on the currency last night was a separate report showing UK factory orders declined in September for the first time in five months. Meanwhile, the pound is steady against the Australian Dollar (1.6660) and stronger against the kiwi (2.1570).

- We expect a range today in the GBP/AUD rate of 1.6600 to 1.6685

:: New Zealand Dollar: The New Zealand Dollar opens lower at 0.7230 after yesterday's decision by the Reserve Bank of New Zealand (RBNZ) to leave interest rates on hold at 3 per cent. RBNZ governor Mr Alan Bollard noted that the path for future rate hikes would be "more moderate" than was projected in recent statements. The kiwi worked its way lower throughout the domestic session as the market now expects rates to remain on hold for the next several months. During the offshore session the unit moved between a high of 0.7255 down to a low of 0.7215. The kiwi is also being outperformed by the Australian Dollar and opens this morning at 0.7720.

- We expect a range today in the NZD/USD rate of 0.7210 to 0.7255

:: Majors: The US Dollar had a mixed session overnight after weaker-than-expected manufacturing data in the Philadelphia region. The Federal Reserve Bank of Philadelphia's general economic index came in at minus 0.7 for September causing the greenback to weaken against several currencies. The Euro hit a five-week high above 1.3100 after a successful Spanish bond auction of up to 4 billion Euro in 10 – 30 year securities. Whilst it is early days, markets have been hesitant to test the resolve of the Bank of Japan after Wednesday's intervention into currency markets for the first time in 6 years. The greenback opens today at 85.70 and remains sharply higher compared to the 15-year lows beneath 83.00 earlier in the week. Japanese Prime Minister Naoto Kan said yesterday that his government is ready to take "decisive measures".

:: Data Releases:

• AUD: No data today
• CAD: No data today
• EUR: Euro Zone, Producer Prices, August
• GBP: No data today
• JPY: No data today
• NZD: No data today
• USD: Uni of Michigan confidence, September

:: Australian Dollar: In the absence of any major economic data yesterday, the Australian Dollar spent most of the domestic session trading the range between 0.9350 and US94 cents. The Melbourne Institute survey of consumer inflationary expectations rose to 3.1 per cent in September from 2.8 per cent in August as labour market conditions continue to show signs of improvement. It was more of the same offshore with the Aussie hitting a high of 0.9390 on the back of stronger base metals prices. Gold is trading at another record high above US$1,274/ounce.

- We expect a range today in the AUD/USD rate of 0.9330 to 0.9410

:: Great Britain Pound: Pound Sterling opens little-changed against the greenback at 1.5617 and remains under pressure after UK retail sales unexpectedly fell last month. Sales in August fell 0.5 per cent from July heightening concerns that economic growth is slowing. The pound hit an overnight low of 1.5537 and plunged to a seven-week low against the Euro (0.8370). Also weighing on the currency last night was a separate report showing UK factory orders declined in September for the first time in five months. Meanwhile, the pound is steady against the Australian Dollar (1.6660) and stronger against the kiwi (2.1570).

- We expect a range today in the GBP/AUD rate of 1.6600 to 1.6685

:: New Zealand Dollar: The New Zealand Dollar opens lower at 0.7230 after yesterday's decision by the Reserve Bank of New Zealand (RBNZ) to leave interest rates on hold at 3 per cent. RBNZ governor Mr Alan Bollard noted that the path for future rate hikes would be "more moderate" than was projected in recent statements. The kiwi worked its way lower throughout the domestic session as the market now expects rates to remain on hold for the next several months. During the offshore session the unit moved between a high of 0.7255 down to a low of 0.7215. The kiwi is also being outperformed by the Australian Dollar and opens this morning at 0.7720.

- We expect a range today in the NZD/USD rate of 0.7210 to 0.7255

:: Majors: The US Dollar had a mixed session overnight after weaker-than-expected manufacturing data in the Philadelphia region. The Federal Reserve Bank of Philadelphia's general economic index came in at minus 0.7 for September causing the greenback to weaken against several currencies. The Euro hit a five-week high above 1.3100 after a successful Spanish bond auction of up to 4 billion Euro in 10 – 30 year securities. Whilst it is early days, markets have been hesitant to test the resolve of the Bank of Japan after Wednesday's intervention into currency markets for the first time in 6 years. The greenback opens today at 85.70 and remains sharply higher compared to the 15-year lows beneath 83.00 earlier in the week. Japanese Prime Minister Naoto Kan said yesterday that his government is ready to take "decisive measures".

:: Data Releases:

• AUD: No data today
• CAD: No data today
• EUR: Euro Zone, Producer Prices, August
• GBP: No data today
• JPY: No data today
• NZD: No data today
• USD: Uni of Michigan confidence, September

:: Australian Dollar: The Australian Dollar opens marginally lower today against the greenback at 0.9370. The Aussie slipped back towards 0.9350 during yesterday''s local session after the Westpac/Melbourne Institute consumer sentiment index fell 5 points to 113.2 in September after two months of solid gains. During overnight trade, the unit moved between a low of 0.9350 up to a high of 0.9420 as the greenback weakened against several major currencies. Meanwhile, the Aussie is up sharply against the Japanese Yen at 80.40 after the Bank of Japan intervened for the first time in six years to curtail the strength of their currency which has recently traded at 15 year highs against the US Dollar.

- We expect a range today in the AUD/USD rate of 0.9350 to 0.9425

:: Great Britain Pound: Pound Sterling opens higher today at 1.5619 as softer-than-expected economic data in the United States pushed the greenback lower against several currencies. The pound hit an overnight low of 1.5448 after UK claims for unemployment benefits rose by 2,300 as the economy braces itself for a series of austerity measures to reduce the budget deficit. Speaking in front of the Trade Union Congress, Bank of England Governor , Mervyn King said the deficit-cutting plan was a "key part" of rebalancing the economy. Meanwhile, the pound is also higher against both the Australian Dollar (1.6650) and the New Zealand Dollar (2.1340).

- We expect a range today in the GBP/AUD rate of 1.6600 to 1.6675

:: New Zealand Dollar: As expected, the Reserve Bank of New Zealand (RBNZ) has left interest rates on hold at 3 per cent. The kiwi is currently trading at 0.7280 against the greenback having initially moved down half-a-cent immediately following the announcement. In the accompanying statement, RBNZ governor Mr Alan Bollard noted that the path for future rate hikes would be "more moderate" than previous forecasts. Meanwhile, the kiwi is up sharply against the Japanese Yen at 62.41 after the Bank of Japan intervened to curtail the strength of their currency which has recently traded at 15 year highs against the US Dollar.

- We expect a range today in the NZD/USD rate of 0.7240 to 0.7300

:: Majors: After much rumour and speculation, the Bank of Japan intervened in currency markets for the first time since 2004 to curtail the strong Yen which is threatening an export-led recovery. The Yen tumbled from 15-year highs versus the greenback (82.88) to this morning's opening level of 85.67 – its biggest one-day slide in almost two years. Speculation is rife that continued intervention will occur on Thursday. Meanwhile, the big dollar has weakened against several currencies after US economic data released overnight was softer than expected. Industrial output rose just 0.2 per cent in August compared to a downwardly-revised 0.6 per cent reading in July. The euro opens largely unchanged today at 1.3011.

:: Data Releases:

• AUD: No data today
• CAD: No data today
• EUR: Euro Zone, Trade Balance, July
• GBP: Retail Sales, Aug
• JPY: No data today
• NZD: RBNZ Rate Decision
• USD: Initial jobless claims (w/e Sept 11); Producer Price Index, Aug

:: Australian Dollar: Speculation the U.S. Federal Reserve will purchase up US$1 trillion in government bonds to aid the economic recovery has weakened the greenback across the board pushing the Australian Dollar to a two-year high near 0.9450 during brisk overnight trade. Profit-takers have since emerged and the local unit opens beneath US94 cents this morning at 0.9390. During yesterday's domestic session the unit drifted back towards US93 cents even as data showed that business sentiment surged in August as global markets calmed. The NAB''s business confidence index rose to a four-month high of 11 from 2 in July. Although down a shade, the Aussie remains strong against the Euro (0.7220) and the British Pound (0.6040)

- We expect a range today in the AUD/USD rate of 0.9350 to 0.9425

:: Great Britain Pound: Pound Sterling (1.5539) opens higher today after U.K. consumer prices rose 3.1 per cent in August. Inflation has exceeded the British government's 3 per cent limit for a second consecutive month on the back of higher food prices. Sterling hit an overnight high of 1.5586 as the greenback weakened across the board amid speculation the U.S. Federal Reserve will purchase up US$1 trillion in government bonds to aid the economic recovery. Meanwhile, the pound is marginally higher against both the Australian Dollar (1.6540) and the New Zealand Dollar (2.1160).

- We expect a range today in the GBP/AUD rate of 1.6500 to 1.6550

:: New Zealand Dollar: The New Zealand Dollar opens little-changed today against the greenback at 0.7335 as local economic data released yesterday weighed on the currency. Retail sales in July dipped 0.4 per cent compared to a 1 per cent rise the previous month. The kiwi fell sharply on the news from 0.7340 straight down to 0.7285. However, the unit rallied in offshore trade up to 0.7390 as the greenback weakened across the board amid speculation the U.S. Federal Reserve will purchase up US$1 trillion in government bonds to aid the economic recovery. The kiwi opens weaker against the Australian Dollar at 0.7790.

- We expect a range today in the NZD/USD rate of 0.7300 to 0.7360

:: Majors: The Greenback is weaker across the board on speculation the U.S. Federal Reserve will increase its quantitative easing program later in the year and buy additional Treasury securities (i.e. print more money) to aid the economic recovery. The U.S. Dollar tumbled to fresh 15-year lows against the Japanese Yen at 82.93 during the offshore session after Japanese Prime Minister Naoto Kan retained the leadership. USD/JPY opens this morning at 83.00. Meanwhile, the Euro rallied above 1.3000 for the first time in over a month as traders shunned the greenback. The 16-nation currency was lower earlier in the session as German investor confidence fell to minus 4.3 in September from +14 in August, the lowest reading since February 2009.

:: Data Releases:

• AUD: Dwelling Starts, Q2
• CAD: No data today
• EUR: Euro Zone, CPI, Aug
• GBP: Jobless Claims, Aug
• JPY: No data today
• NZD: No data today
• USD: Industrial Production, Aug

:: Australian Dollar: The Australian Dollar has more momentum than the Canberra Raiders holding onto its recent gains above US93 cents during local trade on Monday. It opens at 0.9350 today. Investors were keen to buy any dips in the unit and headed into the European session around 0.9320 - a fresh four-month high. Better than expected local and Chinese economic data releases in recent days have helped underpin the currency. During the offshore session the Aussie moved between a low of 0.9320 up to a high of 0.9361. The Aussie also remains strong against the Euro (0.7260) and the British Pound (0.6060).

- We expect a range today in the AUD/USD rate of 0.9320 to 0.9380

:: Great Britain Pound: Pound Sterling opens marginally higher against the greenback at 1.5420. Despite a renewed wave of positive risk sentiment and a weaker big dollar, the pound is being hamstrung by low domestic interest rates and forthcoming fiscal austerity measures dimming growth prospects. In the absence of any economic data releases overnight, the pound traded between 1.5349 and 1.5488. Meanwhile, the pound remains weak against both the Australian Dollar (1.6480) and the New Zealand Dollar (2.1010).

- We expect a range today in the GBP/AUD rate of 1.6440 to 1.6515

:: New Zealand Dollar: The New Zealand Dollar opens higher against the greenback at 0.7335. The kiwi hit a fresh one-month peak during local trade yesterday above 0.7340 and is being supported by strong commodity prices and renewed risk sentiment amongst investors. Overnight, the kiwi moved between 0.7300 and 0.7344. Further gains are expected to be limited over the next couple of sessions in the lead-up to Thursday''s monetary policy statement by the Reserve Bank of New Zealand. Most economists expect interest rates to remain on hold at 3 per cent.

- We expect a range today in the NZD/USD rate of 0.7300 to 0.7360

:: Majors: The Euro (1.2878) rose sharply against the dollar overnight after European banking regulators gave financial institutions more time than analysts expected to meet capital requirements. In overnight trade, the Euro moved from a low of 1.2702 to a high of 1.2891 – its biggest one-day rise in two months. The 16-nation currency was also aided after the European Commission said the region's economy may exceed previous growth forecasts. Meanwhile, the Japanese Yen (83.67) weakened as stronger than expected industrial production data from China on the weekend added to signs the global economy is gaining momentum, reducing safe haven demand.

:: Data Releases:

• AUD: NAB Business Confidence, August
• CAD: No data today
• EUR: French CPI, August
• GBP: CPI, August
• JPY: Industrial Production, July
• NZD: Retail Sales, July
• USD: Advance Retail Sales, August

:: Australian Dollar: The Australian Dollar has hung onto its recent gains and opens the new week at 0.9290. A recent string of positive local economic data has all but confirmed to the market that the Reserve Bank of Australia's next move in rates will be up. The unit held above US92 cents in offshore trade and this is another positive sign for the currency. The local economic calendar is fairly light this week and wider ranges are likely to occur offshore. Meanwhile, the Aussie is very strong against the Euro (0.7295) and British pound (0.6040).

- We expect a range today in the AUD/USD rate of 0.9275 to 0.9340

:: Great Britain Pound: Pound Sterling opens the new week lower against the greenback at 1.5360 despite a boost in risk appetite in recent days. Data released on Friday night revealed that UK producer prices for August came in on expectation at 4.6 per cent for the month of August but this did little to inspire any positive pound movement. The currency tested support at 1.5300 several times last week and lower levels are looming. The pound is also sharply lower against both the Australian Dollar (1.6500) and the New Zealand Dollar (2.0990).

- We expect a range today in the GBP/AUD rate of 1.6440 to 1.6535

:: New Zealand Dollar: The New Zealand Dollar hit a one-month high during European trade on Friday night at US73 cents as concerns for the state of the U.S. economy eased last week and the greenback moved lower. Attention this week turns to the Reserve Bank of New Zealands (RBNZ) monetary policy statement on Thursday. Given the uncertain economic conditions prevailing at present, the RBNZ is likely to keep rates on hold at 3 per cent. The kiwi opens at 0.7290 against the greenback and 0.7856 against the Australian Dollar.

- We expect a range today in the NZD/USD rate of 0.7280 to 0.7345

:: Majors: The big dollar hit a one-week high of 84.37 against the Yen on Friday after Japanese gross domestic product grew at an annualised pace of 1.5 per cent. Central bank officials in Japan are continuing to monitor the strength of their currency which has rallied more than 10 per cent against the greenback this year putting pressure on the nations export performance. Meanwhile, the Euro (1.2710) opens largely unchanged against the greenback. The 16-nation currency has retreated in recent days after reports resurfaced regarding the regions sovereign debt crisis.

:: Data Releases:

• AUD: No data today
• CAD: No data today
• EUR: Euro Zone Industrial Production, August
• GBP: RICS House Price Balance, Aug
• JPY: No data today
• NZD: Food Prices, August
• USD: Monthly Budget Statement, Aug

:: Australian Dollar: Australia's Unemployment Rate (and general state of the economy) continues to be the envy of the western world as indicated by yesterday's release by the Australian Bureau of Statistics of official employment data for August. The figure indicated a drop in the unemployment rate by 0.2%, with the number for August coming in at 5.1% compared with the previous months reading of 5.3%. Both the full time and part time component of the release indicated a strong surge in the jobs and puts a strong case forward for a potential interest rate hike by the RBA before year end. On release of the data the local unit surged from 0.9180 smashing through the 92 cents level onto an eventual local high of 0.9238. During the offshore session the momentum continued with the Aussie briefly touching a four-month peak at 0.9276 after stronger than expected economic data releases in the United States. The unit opens at 0.9228 this morning.

- We expect a range today in the AUD/USD rate of 0.9200 to 0.9280

:: Great Britain Pound: Pound Sterling opens lower today against the greenback at 1.5426 after the Bank of England left its benchmark interest rate unchanged at a record low of 0.5 per cent and its quantitative easing program at GBP200bio. Sterling moved to an overnight low of 1.5375 after the UK's trade deficit widened to GBP8.7bio in July compared to GBP7.5bio in June. Exports slipped to GBP22.3 billion. Meanwhile, the pound continues to be outperformed by both the Australian Dollar (1.6700) and the New Zealand Dollar (2.1280).

- We expect a range today in the GBP/AUD rate of 1.6660 to 1.6720

:: New Zealand Dollar: Yesterday's release of the NZ Manufacturing Sales Index (a gauge of total value of sales in manufacturing) was Kiwi positive during the Asian yesterday and saw the dollar continue its recent upward trend against the Greenback. The report came in at 3.1% quarter on quarter, up 1.7% from its previous reading of 1.4%, resulting in the NZ Dollar hitting a local high of 0.7256. During the European and US sessions, the momentum continued with New Zealand Dollar hitting a high of 0.7287. Next Tuesday's all important Retail Sales number and Thursdays Reserve Bank of New Zealand's interest rate decision hold the key to NZ Dollar direction in the next week with positive outcomes potentially pushing NZDUSD through the crucial 0.73 cents level.

- We expect a range today in the NZD/USD rate of 0.7210 to 0.7290

:: Majors: Stronger-than-expected U.S. economic data could not prevent the greenback slipping towards 15-year lows against the Japanese Yen yesterday (83.48). The U.S. trade deficit narrowed 14 per cent in July to US$42.8 billion whilst weekly jobless claims fell by 27,000 to 451,000. The unemployment insurance claims data was the lowest in two months, easing concerns in the market that the world's largest economy will slip into a double-dip recession. Meanwhile, risk appetite towards the Euro was tempered somewhat as news emerged that Germany's biggest bank, Deutsche Bank AG, is looking at increasing its stake in Deutsche Postbank to help it meet rising regulatory capital requirements. The 16-nation currency opens lower today at 1.2690.

:: Data Releases:

• AUD: No data today
• CAD: Employment, August
• EUR: French Industrial Production, July
• GBP: Producer Prices, August
• JPY: GDP, Q2
• NZD: Terms of Trade, Q2
• USD: No data today

:: Australian Dollar: The Aussie dollar held firm in Asia yesterday despite a negative lead from offshore markets during the previous sessions trading between 0.9100 and 0.9130 for the majority of the day. Reinforcing the strength of the Australian economy was the release of Home Loan data which showed a healthy 1.7% increase in the value of loans during the month of July, above forecasts for a 1.1% rise. During the offshore session overnight the AUD/USD rallied back towards the 92 cent mark with demand coming from a recovery in equity markets and risk sentiment. The local unit opens this morning at 0.9185 ahead of the much anticipated employment report with the official headline rate expected to decline from 5.3% to 5.2%, underpinning the phenomenal performance of the domestic economy. Should the numbers come in above expectations then one would expect the AUD/USD to retest and possibly break through the stubborn 0.9220 resistance level.

- We expect a range today in the AUD/USD rate of 0.9135 to 0.9235

:: Great Britain Pound: The Pound Sterling popped higher in early London exchange yesterday rallying from 1.5380 to an eventual high around 1.5525 against the Greenback. Industrial Production data out of the UK rebounded strongly from the -0.5% June reading posting a solid +0.3% result in July boosting confidence in the economic recovery. This morning sees the GBP exchanging at 1.5475 and 1.6840 against the U.S and Australian dollars respectively with more volatility on the GBP/AUD cross expected in Asia today with the release of local employment figures. This evenings Bank of England meeting will be keenly anticipated with rates expected to remain on hold but the accompanying rhetoric, particularly surrounding the Asset Purchase Target plan, to have an impact on the currency.

- We expect a range today in the GBP/AUD rate of 1.6750 to 1.6900

:: New Zealand Dollar: The Kiwi bounced back from an Asian sell off towards 0.7150 yesterday to enter offshore exchange threatening to break above 72 cents. Resistance eventually gave way with the NZD/USD opening this morning near the overnight highs at 0.7230. Improved risk appetite seemed to be the key behind the move with the release of a slightly better than expected U.S Federal Reserve Beige book report that highlighted a slightly more resilient economy than thought. This morning sees the release of the June quarter economic survey of Manufacturing with all eyes on the key 0.7250 level where sellers appear to be lining up.

- We expect a range today in the NZD/USD rate of 0.7185 to 0.7275

:: Majors: Despite continued negative sentiment surrounding European sovereign debt and a lower than expected reading for German Industrial Production EUR/USD bounced back from its early offshore lows near 1.2650 to open this morning at 1.2720. The release of the U.S Federal Reserve Beige book which documents anecdotal evidence from the 12 district banking regions indicated that two of them pointed to "positive developments or net improvements" with five signalling economic growth at a "moderate pace". Whilst the report did not signal a strong economy it was somewhat of a confidence boost for the markets providing a small boost to equities and risk appetite in general. After making new lows once again in Asia yesterday USD/JPY bounced back from 83.40 to post a high near the 84 level following the report and opens this morning at 83.90. In other news the Bank of Canada raised interest rates for the third consecutive month by 0.25% to 1% overnight sending USD/CAD down from 1.0500 to a low 1.0345 in quick fashion. It does however appear as though rates will remain on hold for the foreseeable future with the accompanying statement saying that "Any further reduction in monetary stimulus would need to be carefully considered in light of the unusual uncertainty surrounding the outlook."

:: Data Releases:

• AUD: Aug Employment Data
• NZD: Q2 Manufacturing Activity
• USD: Jul Trade Balance & Weekly Jobless Claims
• GBP: Jul Trade Balance & BoE Meeting
• EUR: German Aug CPI Revision & ECM Monthly Bulletin
• JPY: Q2 Capital Spending & Aug Consumer Confidence