Australian Dollar:
The release of a better than expected trade balance locally yesterday saw the Aussie begin an uptrend that saw it gain to close to 1.05 prior to the US session. The trade deficit unexpectedly shrank to $178 million in February compared to expectations of a $1bn deficit and was mostly due to increased commodity prices. This helped push the Aussie off 1.0450 as it moved higher through our trading day. Also helping the Aussie higher was an announcement by Treasurer Swan that Governor Stevens has been reappointed as head of the RBA for another three years, the market has looked on this favourably both in terms of what he has achieved and the increased certainty it brings for monetary policy going forward. Despite both these events seeing us push towards 1.0495, we ran out steam up hear and the 1.05 level has alluded us again as US data disappointed, sending equities lower during US trade and dragging us back towards where we open this morning at 1.0460. Looking ahead we have building approvals and retail sales this morning before focus turns to the three big central bank rate decisions.

We expect a range today of 1.0425 – 1.0495

New Zealand Dollar:
The Kiwi continued to improve yesterday, pushing towards 0.8450 before a fall in equities in the US pushed us back towards 0.8415. With little happening locally, some improved Chinese data helped lift us off 0.8400 yesterday afternoon with Non-manufacturing PMI and HSBC Services PMI both improving on last month’s figures. An announcement that the Cyprus bailout has been approved by the troika helped lift us further during European trade below we stumbled at 0.8445 after some weak US employment and ISM non-manufacturing data sent us back below 0.8425. On other currency crosses, NZD/JPY is also lower as we head towards Bank of Japan today, while AUD/NZD remains flat as both currencies move in similar directions.

We expect a range today of 0.8380 – 0.8450

Great British Pound:
After breaking below 1.51 during the Asian session yesterday, the pound has recovered some of its recent losses to trade back up at 1.5130 this morning. The pound initially broke this level after some strong Australian and Chinese data dragged the pound down against its south pacific counterparts which followed through to the pound’s other crosses. The losses didn’t last long though and it was back up over 1.51 in time for the UK open and continued its slow rise even as UK construction PMI disappointed. It seems investors are not keen to move the pound out its current ranges prior to tonight’s Bank of England rate and policy announcement and so we will likely see the pound hold between 1.51 and 1.5150 until later tonight. With the Aussie and the Kiwi both following US equities lower we find the pound stronger against both currencies this morning (GBP/AUD: 1.4470 and GBP/NZD: 1.7980).

We expect a range today of 1.4400 – 1.4510

Majors:
After briefly breaking below 1.28 yesterday, the Euro has recovered overnight to trade back up towards 1.2850 following news that the bailout for Cyprus has been approved by all parties including 1bn Euro from the IMF. The new finance minister for Cyprus, Harris Georgiades, said that he was determined to honour the countries commitments which were called “challenging” and requiring “great efforts” by the head of the IMF. Over in the US, some disappointing ADP employment data for March weighed on the greenback ahead of tomorrow night’s Non-Farm Payrolls but a revision up of the February number did help to limit the downside. Also out in the US, ISM non-manufacturing index was disappointing at 54.4 compared to expectations closer to last month’s figures of 56, this has weighed on risk somewhat with equities lower in the US but gains in the Euro and the Yen haven’t been affected. The Yen has gained as we approach the Bank of Japan rate and policy announcement today with many investors now expecting anything less than announcements of overly aggressive easing starting immediately will see the Yen strengthen. So far Japan has provided a lot of promises and talk but have yet to deliver on any meaningful action, and the market seems to be losing its patience. This morning we find EUR/USD at 1.2845 and USD/JPY at 93.0.

Data releases:

AUD:
Retail sales, Building approvals, AiG performance of services

NZD No data today

JPY:
Bank of Japan rate announcement

GBP BoE rate decision and Asset purchase target, PMI services

EUR:
ECB rate decision, Eurozone PPI, Eurozone PMI composite

USD:
Initial jobless claims, Continuing claims