Australian Dollar:
Whilst investors were left generally disappointed by the fresh stimulus measures announced by the Bank of Japan yesterday, the open ended easing policy due to commence at the beginning of 2014 was viewed as a positive for currencies linked to the Asian growth story. Reaching a late session high of 1.0577 against its US Counterpart an increase in Japans growth forecast from a previous estimate of 1.6 percent to 2.3 percent for the year ahead should have positive flow-on effects for nations like Australia given Japan’s importance as an export destination. Whilst so much of the Aussies direction has been dictated by offshore happenings, Inflationary data due for release this morning remains key for the higher yielding asset with a stronger than expected reading likely to provide some solid support above the 1.0550 level. This morning the Australian dollar opens half a cent stronger at 1.0563.

We expect a range today of 1.0520 – 1.0590

New Zealand Dollar
Following the Japanese Yen higher yesterday the New Zealand dollar firmed against its US Counterpart after the BOJ came out with an open-ended stimulus programme. Trading as high as 0.8454 overnight, the open-ended nature of Japan’s easing has been viewed as a powerful tool however the fact the market has to now wait another 12 months for it to begin suggests the BOJ is saving some ammunition for future battles. In a choppy session which saw the New Zealand dollar trade within a broad one US Cent range the Kiwi has maintained its recent strength opening higher this morning at a rate of 0.8408

We expect a range today of 0.8370 – 0.8440

Great British Pound:
In a wide ranging address made yesterday BOE Governor Mervyn King said it may be time for the UK to address its current inflationary target. As Britain’s economy continues to struggle the BOE’s ability to provide further stimulus has been limited given the presence of stronger than expected price pressures. Suggesting the BOE should adopt a more flexible measure to allow an above target inflation rate during times of slow growth investors will be keen to view the stance of Kings Successor Mark Carney who is set to take over on July 1. Trading between a 24 hour range of (1.5803-1.5841) against its US Counterpart the Sterling opens under pressure this morning at 1.5841. Meanwhile against both the Aussie (1.4993) and the Kiwi (1.8835) the Great British Pound opens weaker

We expect a range today of 1.4960 -1.5020

Majors:
Reversing its recent trend the Japanese Yen strengthened when compared to a weaker Greenback yesterday as witnessed by the USD/JPY Cross which opens notably lower at 88.7250 this morning. In an announcement made yesterday, as expected the Bank of Japan has adopted a 2 percent inflation target whilst also making promises to undertake open ended asset purchases set to commence at the beginning of 2014. Whilst the BOJ has managed to steal the limelight over the past 24 hours further contributing to a weaker US currency, existing home sales unexpectedly dropped in December restrained by weak supply. Meanwhile in Europe, the shared unit has remained suppressed overnight opening at a very similar level to yesterday at 1.3314. With interim support looking solid above the 1.3250 handle ECB President Mario Draghi was once again upbeat in a speech made overnight suggesting the “darkest clouds” over Europe have subsided as an index for investor confidence in Germany showed sentiment was at its highest level in 2 ½ years.

Data releases

AUD:
MI Leading Index m/m, CPI q/q

NZD: No Data Today

JPY:
BOJ Monthly Report

GBP: Claimant Count Change, MPC Meeting Minutes, Unemployment Rate

EUR:
No Data Today

USD:
No Data Today

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