Australian Dollar:
In a very busy week of trade, the Australian dollar failed to breach resistance levels in excess of the 1.06 mark despite improved trade figures from China as well bullish remarks from ECB President Mario Draghi. Coming off the highs witnessed earlier in the week the Australian dollar shed around half of one US Cent on Friday following weak economic data from the US where the trade deficit unexpectedly grew in November. Touching a low of 1.0529 the week ahead is likely to be just as frantic with Home loan data, ANZ Job Ads and the MI Inflation Gauge kicking things off this morning. Opening overall weaker the Australian dollar is currently swapping hands at a rate of 1.0538.

We expect a range today of 1.0500 – 1.0580

New Zealand Dollar
Despite what could be described as an overall positive week for the New Zealand dollar the higher yielding asset tumbled on Friday following commodity prices lower amid renewed concern over a US corporate earnings session which, thus far has thrown up mixed results. Investors were keen to sell the Kiwi for much of Friday taking it lows of 0.8361 against its US Counterpart. With key data releases expected out of China later in the week it’s expected the performance of the commodity based currency will be highly correlated to global risk flows as well as broader equity markets. This morning the New Zealand dollar buys 83.62 US Cents.

We expect a range today of 0.8330 – 0.8390

Great British Pound:
Fears grew overnight on Friday that Britain’s economy may slip back into recession after manufacturing production shrunk by 0.3 percent in November. Down a substantial 2.4 percent from the same period in 2011 the disappointing result took its toll on the Great British Pound. After starting the day at a rate of 1.6178 against its US Counterpart the Sterling is weaker this morning at 1.6126. Whilst happenings else-where also played there part pressure has well and truly been thrust back onto the BOE which only last week decided that no additional stimulus was required to help assist in the economic recovery. Meanwhile on the cross rate this morning the Sterling is substantially stronger against both the Aussie 1.5291 and the Kiwi 1.9268.

We expect a range today of 1.5260 – 1.5320

Majors:
Dominating headlines across currency markets on Friday, the Japanese Yen had its longest losing streak in almost a quarter of a century as the Japanese government announced their intention to spend 10.3 trillion Yen when the Bank of Japan next meet on the 21st of January. Tumbling 1.2 percent against the Greenback the outlook of the Yen which opens this morning at 89.18 will be greatly influenced by just how aggressive the BOJ is in their efforts towards addressing deflation and stimulating a sustained recovery. In other happenings on Friday the US Trade deficit unexpectedly widened in November as American retailers reportedly stocked up on imported goods in response to added consumer demand for goods made overseas. Whilst dragging the market lower, renewed hope surrounding Europe’s economic recovery has yet to wear off following Thursday’s comments from ECB President that Policy Makers have gained the upper hand on a debt-crisis now 3 years old. Reaching highs of 1.3365 against its US Counterpart the Euro opens stronger this morning at 1.3341.

Data releases

AUD:
MI Inflation Gauge m/m, ANZ Job advertisements m/m, Home Loans m/m

NZD: REINZ HPI m/m

JPY:
Bank Holiday

GBP: No data today

EUR:
Italian industrial production m/m, Industrial production m/m

USD:
Fed Chairman Bernanke Speaks