Daily Forex Commentary November 19

- We expect a range today in the AUD/USD rate of 0.6425 to 0.6525

:: Great Britain Pound: The Office for National Statistics reported U.K Consumer Price Inflation declined from a sixteen year high of 5.2% in September to an annual rate of 4.5% in October. Forecasts were for a 0.1% increase in inflation for the month however the 0.2% decrease caught the market by surprise. Also released overnight was the Retail Price Index which highlighted the plight of the current state of the U.K economy declining by 0.3% in October, down from the previous months 0.6% increase. The Pound Sterling was sold off from its overnight highs of 1.5090 to open this morning at 1.4910 against the Greenback whilst early exchange against the Aussie dollar is around 2.3050.

- We expect a range today in the GBP/AUD rate of 2.2850 to 2.3150

:: New Zealand Dollar: The New Zealand dollar remained range bound overnight clinging to yesterday's Asian band between 0.5475 and 0.5525 for the majority of the offshore session. It did momentarily spike to 0.5550 in U.S trade on the back of some early gains on equity markets however once these reversed so too did the Kiwi, which at the moment is very closely correlated to moves on the Dow Jones. The NZD/USD dropped to 0.5460 late in the session and opens this morning at 0.5490 whilst NZD/AUD is currently exchanging at 0.8475 ahead of today's N.Z Producer & Capital Goods Price Indices.

- We expect a range today in the NZD/USD rate of 0.5450 to 0.5550

:: Majors: In U.S economic data released overnight Producer Prices fell 2.8% in October, the biggest drop on record and well below expectations of a 0.4% decline. The news clearly indicates what is commonly referred to as supply side inflation has fallen as a result of a weakening global economy. A drop in prices paid by producers in general is a positive for corporations as it lowers costs, and along with a better than expected earnings result by Hewlett-Packard the news triggered a rally on U.S equity markets. The big dollar sparked into action against the Japanese Yen where it bounced from its overnight lows of 96.00 to post a high of 97.40, while gains were also seen in trade with the Euro where it strengthened from 1.2700 to 1.2570. Later in the session outgoing U.S Treasury Secretary Henry Paulson clashed with lawmakers in his testimony to the House Financial Services committee in Washington urging politicians not to use the governments TARP funds to help struggling homeowners directly. He said that "The rescue package was not intended to be an economic stimulus or an economic recovery package" but that it was designed to stabilise financial markets and the flow of credit. Equity markets did not take kindly to the comments and as such the Dow Jones reversed its early gains to move into negative territory late in the session sending USD/JPY lower again to this mornings open at 96.50. All eyes will now trun to tonights U.S inflation report and the minutes from the Fed''s last meeting for further direction.

:: Data Releases:

* AUD: Oct New Motor Vehicle Sales

* NZD: Sep WBC Leading Index

* USD: Oct CPI, Oct Housing Starts & FOMC Minutes

* GBP: BoE Minutes