Australian Dollar
The Australian Dollar opens back above 1.0500 this morning, albeit by the finest of margins after earlier Greenback strength took the pair to levels below 1.0460 in European hours. Relatively flat growth in consumer prices did little to continue the US Dollar’s momentum however and a sharp jump in the AUD/USD resulted as investors quickly shifted bets back into the ‘yes’ column for QE3. Unable to break through 1.0510, the Aussie is positioned right on the $1.05 handle this morning ahead of the Melbourne Institute’s inflation expectations and further key data from the US tonight.

We expect a range today of 1.0440 – 1.0540

New Zealand Dollar
The New Zealand dollar struggled to gain momentum during its onshore session on Wednesday, sitting predominantly in a 15 point range above 0.8040 until the commencement of the New York session. Recent Greenback strength was shaken up slightly after consumer price inflation came in flat for the world’s largest economy and subsequently the Kiwi was given a boost to trade around 0.8070 as of the Asia open today. The economic calendar remains light for New Zealand today, with only a low impact manufacturing survey due to be released by Business NZ this morning. The Kiwi has gained some ground back on its Australian rival however, and the pair change hands this morning at 1.3005 (0.7689).

We expect a range today of 0.8020 – 0.8110

Great British Pound
Sterling struggled to find momentum yesterday despite the Bank of England disregarding the option of interest rate cuts in its last monetary policy meeting, according to the meeting minutes published overnight. The previous month indicated they may review the merits of a reduction in borrowing costs however the language was absent this month and Sterling subsequently made an attempt towards 1.5700. Unable to break through, Cable has settled back around 1.5680 today ahead of retail sales figures due tonight. Against the Australian dollar, the Pound trades just under levels seen this time yesterday at 1.4930, despite an earlier push to 1.4980; the New Zealand dollar cross is also lower at 1.9430.

We expect a range today of 1.4880 – 1.5000

Majors
The Greenback strengthened overnight, to touch above 79.00 against the Japanese Yen and below 1.2270 against the euro, after a report from Goldman Sachs estimated further quantitative easing (otherwise known as QE3) would likely not take place until late 2012 or early 2013. A supposed delay in the implementation of a policy that directly weakens the US Dollar resulted in a correction of some of these losses, however a flat reading for US CPI threw a spanner in the works and gains were paired against a lot of its trading partners. Despite falling around 40 points against the Yen, relative yields between the two countries kept the USD/JPY supported and this morning they trade back above 78.90. The euro was a little less able to recover earlier losses and remains suppressed below 1.2300, to start today at 1.2285. Looking ahead to a relatively quiet Thursday and Friday, highlights to watch this evening are mostly from the US economic calendar with manufacturing data, building permits and weekly unemployment claims all scheduled for release.

Data releases:

AUD: MI Inflation Expectations

NZD: Business NZ Manufacturing Index

JPY: No data due for release

GBP: Retail Sales m/m

EUR: CPI y/y

USD: Building Permits; Unemployment Claims; Philly Fed Manufacturing Index