Australian Dollar
The Australian Dollar turned previous resistance at 1.0750 into intraday support throughout the Asian session yesterday after a rally in risk pushed it through this barrier on Monday night. Uneventful onshore trade kept the Aussie range bound between this new support and highs of 1.0780 and this pattern continued for the most part offshore. A brief sell off of risky assets following the announcement of a referendum in Ireland sent the Aussie to intraday lows near 1.0730, although the recovery was quick as risk appetite remains bolstered in advance of potential further long term loans to European banks. Trading back at 1.0770 we look ahead today to a data intensive few days for the Australian Dollar, with retail sales and construction figures due for release today, building approvals and private capital expenditure scheduled for tomorrow.

We expect a range today of 1.0720 – 1.0820

New Zealand Dollar
The New Zealand Dollar spent its local session on Tuesday consolidating previous gains made on Monday night. After initially pushing above 84 US cents for the first time in nearly a week, clear resistance just below 0.8420 pushed the Kiwi lower. Oscillating around the 84 cent handle, it was here it entered London hours and despite an improvement in risk appetite it seemed resistance proved too much and pushed the New Zealand Dollar back towards 0.8350. A rally late in the North American session sees the pair at 0.8370/80 this morning although the Kiwi suffers on the Aussie cross, opening today at 1.2860 (0.7776). On a domestic front New Zealand monthly business confidence is scheduled for release although it looks as though risk sentiment is going to remain the overriding driving factor, especially against the Greenback.

We expect a range today of 0.8340 – 0.8430

Great British Pound
Opening support of 1.5815 held for the British Pound in early hours of the day yesterday as risk appetite gathered momentum throughout the day. The announcement of a referendum on the EU’s new fiscal compact by Irish authorities quickly dampened sentiment and the GBP/USD dropped a quick 60 points towards 1.5800. With markets re-evaluation the true implications of the vote, markets quickly recovered and with US consumer confidence hitting a home run, Sterling opens this morning on 1.5900. A basket of fundamentals due for release this evening as well as Inflation hearings within the Bank of England leaves some event risk ahead, although a large focus will still be across to the mainland continent where further ECB bank loans are expected to be announced. Antipodean cross rates open higher this morning with Sterling buying AU$1.4750 and NZ$1.8970.

We expect a range today of 1.4650 – 1.4810

Majors
Retail sales figures boosted the Japanese Yen during its local session on Tuesday as January numbers outpaced December by 1.9%. Pushing back against the US Dollar, the Yen moved back closer towards the 80.00 handle although it was not able to move below. During North American trade US consumer confidence posted an impressive 70.8, up from last month’s 61.5, and this bolstered the US Dollar to pare losses against the Yen to settle at 80.50. Europe is likely to be the focus of the next 24 hours as the ECB is expected to announce a new set of long term financing loans to banks totalling around 470 billion Euros. Markets are well supported on risk sentiment and the Euro trades around 80 points higher this morning despite S&P downgrading Greek Debt to ‘selective default’ status. The widely expected move following the passing of voluntary private creditor write-downs barely created a ripple in the markets and despite a brief dip following concern Ireland will not support the Euro-zone treaty, the single currency trades this morning above 1.3450 with 1.3500 in sight.

Data releases:

AUD: Retail Sales; HIA New Home Sales; Private Sector Credit; Construction Work Done

NZD: NBNZ Business Confidence; Building Consents m/m

JPY: Prelim Industrial Production m/m; Manufacturing PMI

GBP: GfK Consumer Confidence; Net Lending to Individuals m/m; Inflation Report Hearings; Mortgage Approvals

EUR: CPI y/y; French Consumer Spending m/m; German Unemployment Change

USD: Prelim GDP q/q; Chicago PMI; Beige Book; Crude Oil Inventories