Australian Dollar: After dipping below parity late last week for the first time in over a month, the Aussie re-captured some of those losses during Friday trade and begins the new week at 0.9980. The Aussie hit a low of 0.9963 during local trade as risk aversion weighed on the minds of traders and the region’s equity markets were lower for a fourth straight session. The unit rallied to a 24-hour high just beneath US101 cents and the greenback weakened across the board on speculation US policy-makers may call for more stimulus. The market is likely to sell any rallies at the moment given the outlook for domestic interest rates. Markets have priced in several rate cuts including 25 basis points in December and as much as another 50 points by March. Australia’s official cash rate currently stands at 4.50 per cent.

We expect a range today of 0.9920 to 1.0020

New Zealand Dollar: The kiwi (0.7550) opens marginally lower against the US Dollar today after another volatile session. The unit peaked on Friday night at 0.7649 as markets continue to take direction from events in Europe. Speculation that US policy-makers may call for more stimulus weakened the greenback across the board which also aided the move higher. However, the rallies are short-lived at the moment as there is still plenty of water to go under the bridge in Europe. The kiwi also continues to underperform against the Australian Dollar (0.7570) with the cross-rate hitting fresh 6-month lows beneath 0.7550 on Friday night.

We expect a range today of 0.7500 to 0.7580

Great Britain Pound: Pound Sterling opens higher today at 1.5780 against the greenback amid speculation European leaders are stepping up efforts to solve the region’s lingering debt crisis. Sterling hit a high overnight of 1.5887 – it’s biggest intraday rally in over a week. The greenback weakened against a range of currencies after Federal Reserve Bank of New York President William C. Dudley said the central bank could do more to stimulate the economy, raising the prospect of further quantitative easing. Sterling’s progress is likely to be hindered by further talk of stimulus in the UK unless the economic outlook begins to improve. Meanwhile, the pound opens steady against the Australian Dollar (1.5780) and higher against the New Zealand Dollar (2.0880)

We expect a range today of 1.5750 to 1.5850

Majors: The Euro (1.3500) moved higher on Friday as foreign exchange markets continue to take their cue from sovereign spreads. Yields were lower on Friday on expectations the IMF and ECB are stepping up efforts to solve the region’s financial woes. The 17-nation currency hit a high of 1.3613 in overnight trade as Italian bond yields fell below 7 per cent, the threshold at which Greece, Portugal and Ireland sought bailouts. Also aiding the Euro was a news report that European officials may start talks with the IMF on a mechanism for the ECB to lend to it for sovereign bailouts in the region. Meanwhile, the greenback opens little-changed against the Japanese Yen at 76.74.

Data releases

AUD: No data today

NZD: Credit card spending, Oct

JPY: Leading Index, Sept

GBP: Rightmove house prices, Nov

EUR: No data today

USD: Existing home sales, Oct