Australian Dollar:
Australia’s trade deficit unexpectedly widened in January, figures released yesterday revealed. With imports exceeding exports by 1.06 billion, the larger than forecast deficit has been put down to a slump in exports which dropped 1 percent and more particularly the exportation of coal which slumped a whopping 5 percent. Hinting that demand for Australia’s natural resources has slowed from neighbouring China, local growth has become increasingly linked to the prospects of the world’s second largest economy given signs of stagnant activity outside the mining sector. Moving to an overnight high of 1.0288 against its US Counterpart the Australian dollar has been overall well supported with investors picking up the higher yielding asset following improved sentiment from Europe. Maintaining those gains this morning the Aussie Dollar is stronger at a rate of 1.0272

We expect a range today of 1.0240 – 1.0300

New Zealand Dollar
Bouncing 30 basis points either side of its opening level against the Greenback yesterday the New Zealand dollar has overall struggled for direction. Trading within a range of (0.8259 – 0.8312) the Kiwi still appears heavy as it approaches the 83 US Cents level. Opening this morning overall unchanged at a rate of 0.8284 key data releases out of China today most notably Trade Balance figures, CPI and Industrial production should provide some fireworks for the New Zealand dollar with signs of accelerated growth set to be a positive for the currency which is strongly linked to the economic prospects of the world’s second largest economy.

We expect a range today of 0.8250 – 0.8300

Great British Pound:
The Bank of England left interest rates unchanged overnight whilst failing to add to its four year old bond purchase program. Despite three out of the nine MPC members having previously stated that they believe further stimulus is required the market remains braced for the possibility of additional easing in the future given the British economy sits on the verge of a triple-dip recession. Moving upward following the announcement the Great British Pound has been unable to hang onto its earlier gains, failing once again upon approaches towards the 1.5100 level. This morning the Sterling opens surprisingly unchanged against the Greenback (1.5015), the Aussie (1.4614) and the Kiwi (1.8120).

We expect a range today of 1.4580 -1.4630

Majors:
There have been some distinct moves across currency markets overnight with the Euro strengthening the most in eight weeks whilst the Japanese Yen fell to its lowest level since August 2009. Driving the Euro from an opening level of 1.2965 to a high of 1.3117 against the Greenback ECB President Mario Draghi suggested the region’s economy will stabilise later this year that’s despite downgrading the growth forecast for 2013 to - 0.5 percent. Whist Policy Makers also maintained interest rates at 0.75 percent a good part of the rally can be put down to a very successful Spanish Bond auction which highlighted the renewed confidence of global investors towards the broader region. Opening this morning a staggering one and a half cents stronger the Euro is currently swapping hands at a rate of 1.3105. Moving in the opposite direction overnight the Japanese Yen was the other big mover as witnessed by the USD/JPY this morning which opens notably stronger at 94.857. Triggering the most recent round of JPY weakness investors were left encouraged by the Bank of Japan’s final Policy Meeting with Governor Shirakawa in charge. In anticipation of some unheralded stimulus measures Shirakawa is set resign early on March 19. In other happenings, today’s session is shaping up to be just as busy given key economic releases from China as well as the all important labour market reading expected from the US.

Data releases

AUD:
No data today

NZD: Manufacturing Sales q/q

JPY:
Current Account, Final GDP q/q, Bank Lending y/y, Final GDP price index y/y, BOJ Monthly Report, Economy watchers Sentiment

GBP: Consumer Inflation Expectations

EUR:
German Industrial Production m/m, French Gov Budget Balance

USD:
Non-farm employment change, Unemployment rate