Australian Dollar:
The New Year saw US policy makers come to a budgetary agreement in the US Senate. The deal included compromises in payroll tax cuts which would rise to 6.2% from 4.2% and higher income taxes on the wealthy while the unemployed would still be eligible for extended jobless benefits. These budget measures will now be subject to scrutiny by the Republican- controlled House who will either approve or seek amendments to the deal. If approved the budget deal is expected to reduce US growth in the first quarter but the US economy is expected to strengthen later in the year. The Australian Dollar opens today at 1.0392 USD.

We expect a range today of 1.0345 – 1.0425

New Zealand Dollar:
China’s Purchasing Managers’ Index was 50.6 in December, showing a third month of expansion. The report by the National Bureau of Statistics and China Federation of Logistics and Purchasing reflects increasing evidence the world’s second-biggest economy will extend its recovery into the New Year. The New Zealand Dollar rallied to its highest level this past week to 0.8265 against the Greenback.

We expect a range today of 0.8225 – 0.8300

Great British Pound:
Investors were optimistic in the lead up to the US Senate’s budget deal to avert more than $600 billion in automatic tax increases and spending cuts, propelling the Sterling to 1.6273 USD. Local data revealed Britons became more optimistic about the housing-market outlook in December. A gauge by Lloyds Banking Group said the outlook for property prices rose to 20 from 15 in October. Halifax concurred expecting a more stable market this year.

We expect a range today of 1.5520 – 1.5720

Majors:
To recap 2012, Italian and Portuguese bonds and European Stocks rallied through efforts by the European policy makers to contain the market turmoil that threatened to destroy the single currency region. Overnight US lawmakers reached agreement on a fiscal package which economist speculate will would reduce economic growth by more than a half percentage point if they eventually are implemented. The US Treasury Department has hit its $16.4 trillion debt limit and another confrontation between President Obama and Republicans will likely stir as the Treasury exhausts its “extraordinary measures” to keep funding the government.

Data releases:

AUD:
No data today

NZD:
Bank Holiday

GBP:
Manufacturing PMI

EUR:
German Preliminary CPI m/m; Spanish and Italian Manufacturing