Australian Dollar: The Australian Dollar successfully logged its first weekly advance since October after higher yielding assets responded positively to joint efforts by monetary authorities to tackle Europe’s debt crisis. After pushing to highs near 1.0300 during New York hours on Friday, risk sentiment took a hit from a mixed employment report out of the United States and the Australian Dollar returned to earlier ranges around the 1.0210/20; still a 4.3% increase on Monday’s open levels. Trading this morning a few points higher at 1.0250 the Aussie redirects its focus to local events as the much anticipated final RBA meeting for 2011 takes place tomorrow. With global growth slowing and uncertainty in Europe remaining in the forefront of investor’s minds many market participants are anticipating a cut in domestic interest rates, made even more likely by the two month gap between tomorrow’s meeting and the next. Also of interest is the ANZ Job Advertisements report for the month of November as well as the AIG Services Index, both due out this morning.

We expect a range today of 1.0150 – 1.0260

New Zealand Dollar: After consolidating gains made earlier in the week, the New Zealand Dollar pushed marginally higher on Friday morning and spent the majority of the local session trading just above 78 cents to the Greenback. Some of the gains, which were made off the back of improved risk sentiment, were pared as a US jobs report sent mixed messages to the market although the Kiwi held up against the pressure relatively well. Touching lows around 0.7765 it finished the week just off these levels, and this morning we see the local dollar back around 78 cents. Key to the Kiwi’s direction today is NBNZ Business Confidence levels for November and any developments out of Europe in the lead up to the EU summit scheduled for Thursday and Friday. On the cross rate the NZD/AUD remains in the middle of its weekly range and open’s this morning at 0.7600.

We expect a range today of 0.7730 – 0.7820

Great British Pound: Growth in the United Kingdom’s construction sector slowed in November following an unexpected gain the month prior. However with an index of 52.3 reading very close to market expectation little reaction was seen in the local currency. Cable spent the earlier hours of the session in quiet Friday trade around the 1.5690 mark and pushed tentatively towards 1.5720. The levels proved unsustainable and as the Greenback set about paring losses against most major counterparts Cable fell back to 1.5580 by the afternoon in New York. Opening levels this morning see Sterling slightly higher at 1.5630 ahead of Services PMI due out this evening. On the cross-rates, Sterling is lower against the Aussie at 1.5230 and also against the Kiwi at 2.0000.

We expect a range today of 1.5220 – 1.5360

Majors: The Euro had set about posting weekly gains for the first week in five last week and, after several events in the Eurozone and US gave markets a glimmer of hope, the shared currency rallied to an seven day high near 1.3540 during North American trade on Friday. Enabling the spike was a sharp drop in US unemployment with the monthly rate falling from 9% in October to 8.6% in November. Markets had a very brief rally on this and the announcement of 120,000 extra jobs on the non-farm payrolls report, however it soon became clear the figures were skewed to the upside due to a significant number of people giving up the hunt for work; thus reducing the size of the workforce. The risk rally was consequentially dampened with Euro losing over a cent against the safe-haven Greenback and the Yen also reclaiming some previously lost ground pushing the pair back below 78.00. Opening this morning markets will be looking towards a European Union Summit scheduled to take place in Brussels on Thursday and Friday as short-term optimism of a possible deal wavers; the ECB’s central bank meeting on Thursday also highlighted as a key risk event this week.

Data releases:

AUD: AIG Services Index; ANZ Job Advertisements m/m; Company Operating Profits q/q

NZD: No data due for release

JPY: No data due for release

GBP: Services PMI

EUR: Retail Sales m/m; Sentix Investor Confidence

USD: ISM Non-Manufacturing PMI; Factory Orders m/m;