Australian Dollar
The Australian dollar has gained ground over the last 24 hours as market participants speculate the RBA will keep rates on hold when they meet next Tuesday. Strong economic growth amongst other economic indicators leaves many to believe the economy is strong enough to weather the European crisis and after two consecutive rate cuts totalling 75 basis points, the RBA should hold fire in July. Rising from its lowest level in nearly two weeks, the Aussie pushed to highs close to 1.0080 before settling to trade this morning around 1.0060. Risks to the Aussie strength lie ahead later this week and with no key events scheduled on the local calendar, the buzz of the upcoming EU summit will likely drive risk sensitive currencies such as our dollar in the short term.

We expect a range today of 1.0000 – 1.0110

New Zealand Dollar
Continueing its week of range bound trading yesterday the New Zealand Dollar has enjoyed a relatively subdued session overnight recording overall modest gains against its US Counterpart. After earlier trading as low as 0.7865, the higher yielding currency has managed to crack the critical 79 US Cents level this morning, currently swapping hands a rate of 0.7911. With investors seemingly deferrring any decisive steps ahead of the the European Summit set to kick off overnight Thursday, the riskier backed asset could be headed for some slighlty chopper waters ahead of key risk events out of Europe as well as a busy US Economic Calender. Meanwhile locally this morning investors attention will be focused towards Trade Balance figures which are due for release at 9 am.

We expect a range today of 0.7860 – 0.7960

Great British Pound:
UK Stocks swung between gains and losses overnight as investors continued to speculate on the outcome of the European Summit set to commence overnight Thursday. With range bound trading evidence enough of a jittery market, the cost of insuring Italian and Spanish debt again spiked overnigh sending yields sky-high. Trading between a 24 hour range of (1.5562 – 1.5650) against its US Counterpart the Sterling has managed to find some upside against the Greenback this morning opening around half a cent stronger at 1.5634. Looking ahead this week in addition to the European Summit investors will also be closely watching the outcome of Final GDP Figures which are due for local release on Thursday. Meanwhile on the cross rates the Sterling opens unchanged against both the Aussie (1.5530) and the Kiwi (1.9760)

We expect a range today of 1.5480 – 1.5590

Majors:
In a continued sign that the US housing market is no longer a headwind to the worlds largest economy, following on from stronger than expected New Home Sales earlier in the week an Index of US Homebuilders released overnight showed house prices decreased at their slowest pace since 2010. Despite the S&P 500 which also gained 0.5% the overall mood of the market remains one of caution as demonstrated through a weak US Consumer Confidence reading as investors nervously await the outcome of yet another European Summit which is due to commence later in the week. Whilst in Europe, Italian and Spanish Bond yields continued their recent upward trend overnight as Spain remains poised to be drowngraded to Junk Status by Moody’s Investor Services following the the downgrade of 28 Spanish Bank yesterday. In what has been a relatively subdued start to the week the shared currency was again sold off overnight trading to an eventual low of 1.2441 against its US Counterpart rebounding only slighlty to open weaker this morning at a rate of 1.2494

Data releases

AUD:
No data today

NZD: Trade Balance

JPY:
No data today

GBP: CBI Realized Sales, BBA Mortgage Approvals

EUR:
German Prelim CPI m.m

USD:
Core Durable Goods Orders m/m, Pending Home Sales