Australian Dollar
The Aussie opens the new week lower at 1.0330 on global growth concerns and the prospect of lower domestic interest rates. Last Friday, bearish sentiment took hold on both currency and equity markets taking the Aussie within a whisker of three-week lows against the greenback at 1.0286 late in the New York session. The Australian share market posted its biggest weekly fall in six months amid ongoing fiscal concerns in the United States. Also weighing on the local unit at the moment is further action by the Reserve Bank of Australia (RBA) in loosening monetary policy. The official cash rate stands at 3.25 per cent and the market is not ruling out a cut in December. RBA board meeting minutes from November are due for release tomorrow and in the meantime, there is more risk to the downside for the Australian Dollar.

We expect a range today of 1.0280 – 1.0350

New Zealand Dollar: The kiwi opens the new week little changed against its US counterpart at 0.8120. However, risks to the downside remain amid ongoing global growth concerns and this saw the kiwi hit a two-month low on Friday night of 0.8051. Buyers quickly came out of the woodwork at these levels which saw the unit shoot back up over the US81-cent mark. Other than 3rd-quarter producer price data this morning, there is no economic data being released in New Zealand this week and the market will instead look to any developments offshore. Data releases in the Euro zone and the US last Friday night all pointed towards a slowdown which is taking some shine off both the Australian and New Zealand currencies.

We expect a range today of 0.8050 – 0.8135

Great Britain Pound
Pound Sterling nudged two-and-a-half month lows (1.5834) against the Greenback on Friday night amid renewed signs the British economy is struggling to recover. Comments from the Bank of England did not help the currency's cause after Governor Mervyn King told reporters that further stimulus in the form of asset purchases has not been ruled out. The pound recovered some lost ground late in the session and opens the new week in Sydney at 1.5880. Meanwhile, the pound opens little-changed against the Australian Dollar (1.5360) and lower against the New Zealand Dollar (1.9560).

We expect a range today of 1.5330 – 1.5410

Majors
Economic data out of the Euro zone last week confirmed the region has slipped into recession for the second time in four years pushing the 17-nation currency towards two-month lows. The Euro hit an overnight nadir of 1.2689 after third quarter GDP slipped 0.1 per cent having contracted 0.2 per cent the previous quarter. The greenback firmed across a range of currencies last Friday on safe-haven flows as the United States edges nearer and nearer to the so-called fiscal cliff. Meanwhile, the Japanese Yen hit fresh six-month lows (81.43) against its US counterpart in the lead-up to next months election in Japan. The market has not ruled out further falls towards 84.00 for the Yen as polling reveals power may be handed to the opposition party which supports further aggressive monetary stimulus.

Data releases

AUD: No data today

NZD: Producer prices inputs & outputs, Q3

JPY: BoJ Monetary Policy Meeting

GBP: Rightmove house prices, November

EUR: No data today

USD: Existing home sales, October