Australian Dollar:

In what was another bumpy ride for the Australian Dollar yesterday as the Nation’s currency came under some selling pressure early on, with Australia’s Government saying it will reduce spending by A$6.8 Billion, cutting the Surplus forecast for the Fiscal year starting July 1 2012 to A$1.5 billion.

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Despite the early sell-off the Australian Dollar rallied hard for the remainder of the session, reaching its highest level against its US Counterpart since November 21. Trading as high as 1.0076 the Aussie Dollar was well supported by strong US Consumer Confidence figures which came in well above expectation, spurring demand for the higher-yielding currency. With global stocks also rallying overnight the Australian Dollar opens a full cent higher this morning currently trading at a rate of 1.0023 against its US Counterpart.

We expect a range today of 0.9910 – 1.0080

New Zealand Dollar:

The New Zealand Dollar rose to its highest level in a week yesterday, in signs that Americans are becoming less pessimistic on the outlook of jobs and wages. Spurring demand for the Kiwi overnight US Consumer Confidence figures came in well above expectation helping push the New Zealand Dollar to an overnight high of 0.7651.

With Global Stocks rallying and commodities finishing the day higher the Kiwi opens this morning just shy of a full cent stronger, currently buying 76.21 US Cents. Looking ahead today in what is shaping up as a very busy 24 hours as far as economic data releases are concerned any further advance above the 76 US Cents level is likely to hinge largely on US and Euro Zone Fundamentals.

We expect a range today of 0.7540 – 0.7680

Great British Pound

The Great British Pound opens a full cent higher against its US Counterpart this morning at a rate of 1.5607. In a busy session overnight, Mortgage Approvals, Net Lending to Individuals and Nationwide HPI figures all returned positive results with actual figures beating the majority of expectations.

In further news flows, BOE Governor Mervyn King said that the UK is being “increasingly threatened” by the Euro-Area Crisis. Despite the warning the Sterling flourished against a weaker Greenback overnight, reaching an eventual high of 1.5655. Meanwhile this morning the Great British Pound opens lower against a significantly stronger Australian Dollar at a rate of 1.5572

We expect a range today of 1.5500 – 1.5640

Majors:

Global Stocks extended their gains overnight with the S&P 500 adding 0.3 percent. In the US overnight, global optimism was pushed higher as the Conference Board’s Consumer Confidence Gauge climbed to 56 against a forecast reading of 43.9. In a further sign that the US economy remains well insulated at least for the time being from the woes of its European Counterparties, the report was the third-strongest in relation to expectation since 1999. Following the strong reading, the US Currency was sold off with the Dollar Index declining 0.3 percent; meanwhile this morning the US Dollar opens weaker against the Japanese Yen at a rate of 77.923.

In European news flows, finance ministers are due to meet this evening to discuss the possibility of channelling ECB loans to struggling Nations through the IMF, hence bringing the ECB to the front line in an attempt to expand its bailout fund to 1 Trillion Euros. In Italy overnight the struggling Nation was again forced to pay above the 7 percent threshold to sell 7.5 Billion Euro’s worth of bonds, with Bond-Yields still remaining a concern the EURO had another choppy day of trading, ranging between a low of 1.3285 and a high of 1.3441 against its US Counterpart. This morning sees the EURO open relatively unchanged at a rate of 1.3330, with plenty in the form of economic release due this evening volatile conditions are expected to continue.

Data releases

AUD: HIA New Home Sales, Private Capital Expenditure q/q, Private Sector Credit m/m

NZD: Building Consents m/m

JPY: Manufacturing PMI, Prelim Industrial Production, Average Cash Earnings y/y, Housing Starts y/y.

GBP: Public Net Borrowing

EUR: German Retail Sales m/m, ECB President Draghi Speaks, German Unemployment Change, Italian Monthty Unemployment Rate, ECOFIN Minutes, CPI Flash Estimate y/y, Unemployment Rate, Italian Prelim CPI m/m,

USD: Challenger Job Cuts y/y, ADP Non-Farm Employment Change, Revised Nonfarm productivity q/q, Revised Nonfarm Productivity q/q, Chicago PMI, Pending Home Sales m/m, Beige Book.