Australian Dollar:
The Australian dollar remained firm during intraday yesterday consolidating nicely the gains witnessed across the board this week. Tracking marginally higher to a peak of 1.0562 against its US Counterpart the Aussie appeared heavy around levels in excess of 1.0550. With the dust having now settled on the US Fed’s decision to increase asset purchases by $45b the Greenback was substantially stronger overnight hurting the Aussies attempt to sustain earlier highs. Opening this morning at a rate of 1.0513, attention has once again turned to US debt negotiations where Congressmen are expected to remain in deadlock until the very last hour. Meanwhile on the outlook today Chinese PMI figures expected to be released early this afternoon will be closely watched by investors given factory output in the world’s second largest economy has been showing some improved signs over past month.

We expect a range today of 1.0480 – 1.0550

New Zealand Dollar
It what has been a remarkable week for the New Zealand dollar the higher yielding asset fell from a nine-month high against its US Counterpart overnight. Having reached a high of 0.8260 late in the afternoon, investors diversified their holdings away from the Kiwi as North American markets opened for the day. Amid ongoing concerns that Politicians are making no progress in an attempt to avert the highly publicised fiscal cliff, debt fears are likely to overshadow any underlying positives within the market, as was the case overnight. In the absence of any local announcements today Chinese manufacturing data as well as a handful of economic releases in Europe will likely set the tone for the Kiwi over the coming 24 hours. This morning the New Zealand dollar opens lower buying 84.25 US Cents.

We expect a range today of 0.8400 – 0.8450

Great British Pound:
The Great British Pound has struggled to keep pace with a stronger Greenback over the past 24 hours, tumbling to lows of 1.6083. Opening this morning around 40 basis points weaker than this time yesterday at 1.6108, improved sentiment from Europe and positive data releases out of the US were not enough to steady a falling Sterling. Whilst further Monetary Easing is set to keep the US Dollar subdued for a while yet there was some reprieve for the world’s reserve currency overnight as fiscal cliff fears dominated the focus of an otherwise positive session. Meanwhile on the cross-rates this morning the Sterling is stronger against the Aussie (1.5319) and weaker against the Kiwi (1.9113).

We expect a range today of 1.5290 – 1.5350

Majors:
Recovering quickly from the US Federal Reserve’s decision to add a further $45b worth of asset purchases to its already ballooning balance sheet overnight Wednesday, the Greenback has managed to strengthen against 14 of its 16 major counterparties over the past 24hours. Despite weekly unemployment claims which produced a better than expected figure and Retails sales which grew by 0.3 percent in November, all the good news was clearly overshadowed by the never ending fears surrounding the fast approaching US fiscal cliff. In line with recent comments made by Fed Chairman Ben Bernanke, expansionary Monetary Policy cannot offset the effects of the US fiscal cliff. Rallying against the Japanese Yen the Greenback opens stronger this morning at a rate of 83.56. Meanwhile in Europe and despite US debt fears which are set to engulf the entire market the Euro has remained firm against its US Counterpart trading between a 24 hour range of (13040 – 1.3100). Opening this morning at a rate of 1.3075 the approval of Greece’s next aid payment as well as the establishment of a banking supervisory framework which will see approximately 200 of the region’s biggest banks come under direct ECB oversight have both substantially helped the cause of the shared unit.

Data releases

AUD:
No data today

NZD: No data today

JPY:
Tankan Manufacturing Index, Tankan Non-Manufacturing Index,

GBP: MPC Member Weale Speaks

EUR:
French Flash Services PMI, French Flash Manufacturing PMI, German Flash Services PMI, German Flash Manufacturing PMI, Flash Services and Manufacturing PMI, EU Summit, CPI y/y

USD:
Core CPI m/m, Flash Manufacturing PMI, Industrial Production m/m, Capacity Utilization Rate