Australian Dollar:

The Aussie’s march back towards 1.04 came to a bit of standstill on Friday night with risk aversion sending it back down towards 1.03, reversing gains that began earlier in the week. Last week the Aussie climbed off lows near 1.0230 after stronger equities and commodity prices saw a gain in risk correlated assets. The main causes of the pull back on Friday night were some mixed data out of the US and Europe along with sharp falls in Wal-Mart shares dragging the Dow down. While US consumer sentiment increased in February (76.3) it was a pullback in industrial production (-0.1%) that saw the Aussie give up much of its recent gains. This morning we find the Aussie currently at 1.0290 with the main local data this week being RBA minutes tomorrow which investors are hoping will provide some guidance on the RBA’s likely move next month.

We expect a range today of 1.0250 – 1.0330

New Zealand Dollar:
Last week saw a solid round of data from New Zealand sending the Kiwi back over 0.85 against its US counterpart. On top of Thursday’s much better than expected manufacturing data, we also saw a solid reading for local retail sales numbers on Friday morning coming in at 2.1% versus expectation of 1.4%. The recent strong economic data continues to drive the Kiwi up and on Friday we managed to reach levels not seen since September 2011 against both the USD and the AUD before profit taking and risk aversion saw a bit of pullback during US trading. The week ahead locally is looking pretty quiet with just ANZ job ads and credit card spending data, however offshore data should still help drive sentiment and the Kiwi with highlights being Fed minutes and US and European CPI figures. Meanwhile this morning we open at 0.8435.

We expect a range today of 0.8380– 0.8485

Great British Pound:
The pound keeps going from bad to worse with the release of lower than expected retail sales on Friday night sending it to six month lows against its US counterpart. The cable fell close to 1.5460 after the Office of National Statistics reported retail sales for January fell 0.6% compared to expectations of a 0.9% gain. The pound has been one of the worst performing currencies this year and if the poor data continues this week then further falls are likely. The focus for the sterling this week will be jobs data and then Bank of England minutes, both on Wednesday, which if it is anything like recent comments made by Governor King could see the pound lower again. This morning we find ourselves just above 1.5500 against the USD while the pound is stronger against the Aussie (1.5050) and the Kiwi (1.8355).
We expect a range today of 1.4975– 1.5100

Majors:
Last week a lot of movement was seen on the back of speculation on what stance the G7 and G20 would take on the so called ‘currency war’ with the Japanese Yen getting most of the attention. On Tuesday night we got our first indication with the G7 initially delivering a balanced statement before comments from individuals did go as far as singling out the Yen for its recent volatility. This helped the Japanese Yen claw back some of its recent losses, with USD/JPY falling back below 93 leading up to the G20 announcement which many expected would provide similar views. However the G20 statement, while providing strong words against currency manipulation, did not directly target Japan. This lead many investors to speculate the Yen is now free to continue its slide against most major counterparts with the BOJ effectively given permission to fuel further devaluation through heavy easing policies. The Yen finished the week back above 93.50 with a move back above 94 likely early this week. On the other majors, EUR/USD fell on risk aversion on Friday night after some mixed economic data out of Europe and the US. Eurozone trade surplus came in larger than expected (12b) but both imports and exports provided poor numbers, it was just imports fell faster. Over in the US we had better than expected consumer sentiment but US industrial production fell. This morning we find EUR/USD currently at 1.3345 while today should be a quiet day with a US public holiday but later in the week we have Fed minutes and Eurozone and US inflation data.

Data releases:

AUD:
New motor vehicle sales

NZD:
Performance services index

JPY:
Machine tool orders

GBP:
Rightmove house prices

EUR:
Current account

USD:
Public holiday