New Zealand Dollar:  The New Zealand dollar was lower against its U.S. counterpart on Monday after European leaders agreed to strengthen economic integration in the euro zone but failed to reassure markets on the handling of the region”s debt crisis. After beginning the week above 0.7750, closer scrutiny of Friday’s developments soon sent risk sentiment crumbling and the Kiwi fell to an eventual low of 0.7615. Opening this morning slightly higher at 0.7630, in a week where the local economic calendar is relatively light, overseas developments will continue to dominate the Kiwi’s direction. On the cross rates, the New Zealand Dollar has lost a little ground against the Aussie although it still remains in recent ranges at 0.7580.

We expect a range today of 0.7570 – 0.7650

Great British Pound: A report published by economists at Standard Chartered bank predicted the economy in the UK would contract by 1.3% in 2012, in contrast to their previous growth prediction of 0.6%. Although Standard Chartered’s forecast in worse than the average economists’ predictions, it still played on investor’s nerves and sent the Pound Sterling south to lows below 1.5550. Despite an attempt to pare earlier losses, the majority of gains proved unsustainable in the current risk-off environment and Cable opens this morning around 1.5580. Moving higher against its more risk-sensitive counterparts the GBP/AUD trades at 1.5470 and the GBP/NZD at 2.0420.

We expect a range today of 1.5380 – 1.5550

Majors:  Foreign exchange markets began the week in a risk-off fashion as any optimism created from last week’s EU summit is slowly eroded away. Credit rating agency Moody’s came to bat overnight, saying it will review the ratings of European Union nations after plans released at the conclusion of the summit failed to produce decisive steps to end the debt crisis. Fitch also joined that party re-affirming Moody’s sentiment and highlighting nothing in the new plan will ease pressure on Europe’s sovereign bond ratings. After opening on Monday morning around 1.3370 the Euro soon set about a one way move to the down side, taking out 1.3300 by early Europe hours and 1.3200 during the North American session. Finding support at 1.3170 yearly lows near 1.2880 are in sight if support around 1.3150 is broken. The Greenback, helped along by European woes and encouraging economic indicators of late, has remained in an upward channel and looks ahead to this evening’s FOMC statement for further direction. Aside from posting gains against the riskier classed currencies, it has also gained ground against the Japanese Yen, trading at 77.90 this morning.

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Data releases:

AUD: NAB Business Confidence

NZD: FPI m/m

JPY: Tertiary Industry Activity m/m

GBP: CPI y/y; RPI y/y

EUR: German ZEW Economic Sentiment

USD: Retail Sales m/m; FOMC Statement; Business Inventories m/m; Federal Funds Rate

This information has been written by Carly Pickering of OzForex Pty Ltd (AFSL 226 484). It is republished at Forex.com.au as general information only. IMPORTANT : This information has been prepared for distribution over the internet and without taking into account the investment objectives, financial situation and particular needs of any particular person. OzForex Pty Ltd makes no recommendations as to the merits of any financial product referred to in its website, emails or its related websites.

We expect a range today of 1.0290 – 1.0410

New Zealand Dollar:

The New Zealand Dollar remained range bound for the majority of yesterday’s session trading between a 24 hour low of 0.7922 and a high of 0.7989 against its US Counterpart. With some clear resistance now marked around the 80 US Cents level, investors are set to remain on the side-lines in the short-term until some further clarity over Europe’s Debt is established. Providing support for the Kiwi yesterday local equities finished around 0.3 percent higher, commodities were stronger whilst global risk sentiment turned positive following the announcement that the Italian PM has promised to resign after parliament passes economic reforms demanded by the European Union. Looking ahead this morning the New Zealand Dollar opens stronger currently buying 79.78 US Cents.

We expect a range today of 0.7910 – 0.8030

Great British Pound

UK Stocks rallied for the first time in three days yesterday as the Sterling opens noticeably stronger against its US Counterpart this morning at rate of 1.6109. After earlier trading to a 24 hour low of 1.6034 the Great British Pound followed the FTSE 100 Index higher with a raft of strong corporate numbers helping renew optimism that the market remains relatively robust despite the ongoing concerns surrounding the broader Europe. Providing further support for the Sterling yesterday was the planned resignation of Italian PM Silvio Berlusconi as the Sterling opens stronger against both the Australian Dollar (1.5512) and the New Zealand Dollar (2.0176).

We expect a range today of 1.5440 – 1.5610

Majors:

US Stocks rallied, the S&P 500 climbed 0.5 percent and the EURO rose yesterday as optimism blossomed throughout financial markets. In what has come as a sigh of relief for many investors Italian Prime Minister Silvio Berlusconi has agreed to step down after the PM failed to muster an absolute majority during a routine parliamentary ballot, obtaining only 308 votes in the 630-seat Chamber. As a result a successor is due to be announced once the parliament approves the countries austerity measures, with fresh hope that a change in leadership will help side-line fears of further contagion throughout the region. Following the announcement the EURO rallied to reach an eventual high of 1.3846 against its US Counterpart opening half a cent higher this morning at a rate of 1.3827. Meanwhile in the US overnight Berlusconi’s offer to quit was also well received with financial shares being the major benefactor pushing the Dow Jones higher by 0.7 percent. Meanwhile this morning the Greenback opens stronger against the Japanese Yen at a rate of 77.691

Data releases

AUD: Westpac Consumer Confidence 

NZD: No Data Today

JPY: Bank Lending y/y, Current Account  

GBP: BRC Shop Price Index y/y, Trade Balance

EUR: French Gov Budget Balance

USD: Fed Chairman Bernanke Speaks, Wholesale inventories m/m, FOMC Member Tarullo Speaks, Loan Office Survey

New Zealand Dollar:

It was again Europe which stole the limelight yesterday, local Equities trended lower as the kiwi trickled to an intraday low of 0.7915 against its US Counterpart. With nothing in the form of local data to offer the nation’s currency any real direction, the main agenda still lies within Europe as Italy’s 10 year bond yield rose to its highest level in 14 years as investors start to ask the question as whether Italy can afford to service its ballooning debt commitments. This morning sees the New Zealand Dollar open relatively unchanged from the same time yesterday at a rate of 0.7972 having traded within a tight 24 hour range of less than one US Cent the Kiwi appears well supported above the 0.7900 level

We expect a range today of 0.7890 – 0.7995

Great British Pound

In positive news flows released out of the UK overnight UK House Prices increased in October for the first time in three months according to Halifax, with prices accelerating 1.2 percent from September. As the Sterling struggled to distance itself from the woes of its European neighbours the Great British Pound traded to an overnight high of 1.6078 against its US Counterpart, rebounding well from its earlier lows of 1.5978. All eyes will be on the Bank of England come Thursday this week where despite the housing market remaining relatively resilient the Central is widely expected to hold its key interest rate unchanged at a record low of 0.5 percent. Meanwhile this morning the Sterling opens lower against the Greenback and the Kiwi however stronger against the Australian Dollar at a rate of 1.5471.

We expect a range today of 1.5380 – 1.5550

Majors:

European Stocks tracked lower yesterday after Italian benchmark yields climbed to a euro-area all time high amid renewed concerns that Europe’s third-largest economy will struggle to repay its ballooning level of debt. Whilst there remain very real fears that Italy may soon become the new Greece, the likelihood of a Greek Default have subsided with the news overnight that Greek Prime Minister George Papandreou will stand down and assist policy makers to help form a new unified government to ensure the Nation receives the crucial bailout funds promised by European powerbrokers. Following the mixed news flows out the Region the EURO lost considerable ground against its US Counterpart trading as low as 1.3680, before opening this morning half a cent lower at a rate of 1.3771. In the US overnight US Stocks recovered from earlier losses as Juergen Stark, The European Central Banks President said that the ongoing European debt crisis will be under control in two years. Looking ahead today the recent theme of trading off headlines is likely to continue with the EURO and Greenbacks direction very much dictated by European news flows. Following a relatively flat day the Greenback opens weaker against the Japanese Yen this morning at a rate of   78.056

Data releases

AUD: Trade Balance, NAB Business Confidence 

NZD: No Data Today

JPY: No Data Today

GBP: DRC Retail Sales Monitor y/y, RICS House Price Balance, Manufacturing Production m/m, Industrial Production m/m

EUR: German Trade Balance, French Trade Balance, ECOFIN Meetings

USD: IBD/TIPP Economic Optimism, FOMC Member Kocherlakota Speaks, FOMC Member Plosser Speaks

We expect a range today of 0.7860 – 0.7950

Great British Pound:  An unexpected rise in output from the UK’s construction sector helped the Great British Pound minimise falls against the Greenback overnight as the dollar pared losses across the board. Falling from highs around 1.6030 Cable found initial support at 1.5980 before moving lower to 1.5940. Opening just above these levels at 1.5945 the economic docket holds the release of Services PMI; however focus is likely to be directed more towards the Euro-zone where the G20 summit begins as well as the scheduled ECB rate decision. Sterling opens this morning relatively unchanged against the Aussie Dollar at 1.5410, yet slightly higher against the Kiwi at 2.0150.

We expect a range today of 1.5340 – 1.5490

Majors: The Greenback has pared recent losses against the Euro, along with several other of its major trading counterparts, as the monthly meeting of the Federal Open Market Committee revealed no changes in its current policy. The FOMC revealed ‘Operation Twist’- the exchange of shorter dated bonds for longer dated bonds- would remain in place although no further quantitative easing measures would be put into place. After dropping to 1.3820 earlier in the session on improved risk appetite, the Greenback rallied to 1.3720 after the central bank’s statement was released, helped along also by a larger than expected increase in non-farm employment as surveyed by ADP. At open this morning the pair trade at 1.3730/40 and the USD/JPY remain in tight range-bound trade around 78.00. Market participants are expecting to focus their attention on the beginnings of this month’s G20 meeting kicking off in Cannes this evening as well as the monthly meeting of the European Central Bank, where speculation remains as to a potential cut in interest rates to help the indebted euro-zone.

Data releases

AUD: Retail Sales m/m; AIG Services Index

NZD: Employment Change q/q; Unemployment Rate

JPY: Bank Holiday- No data due for release

GBP: Services PMI

EUR: Minimum Bid Rate; ECB Press Conference

USD: ISM Non-Manufacturing PMI; Factory Orders m/m; Prelim Nonfarm Productivity q/q

New Zealand Dollar:

The New Zealand Dollar opens noticeably lower against its US Counterpart this morning currently trading at a rate of 0.7954. After initially trading as high as 0.8105 around midday yesterday, the Kiwi was sold across the board late in the domestic session and into US Hours. Triggering losses overnight was news that Greek Prime Minister George Papandreou will take the Euro Zones latest bailout package to Referendum making investors a lot more uncertain that the Nation will be able to successfully avoid default. Looking ahead today, further upside is likely to remain limited with local equities taking negative leads from offshore, local Unemployment figures expected for release tomorrow remain the only domestic data likely to have any major influence on the currencies short-term direction.

We expect a range today of 0.7890 – 0.8030

Great British Pound

UK Stocks experienced their biggest three day drop since September yesterday with the benchmark FTSE 100 Index Tumbling 2.2 percent. Following the equity market lower was the Great British Pound which traded to a 24 hour low of 1.5889 against its US Counterpart as it opens noticeably lower this morning at a rate of 1.5958. Well and truly denting the optimism and Euphoria created throughout Europe last week Greek Prime Minister George Papandreou announced plans to put the new bailout package to a referendum of the Greek people, sending markets into a spin and amplifying the very real chance of default should voters reject the financial accord. In unrelated news Chinese manufacturing declined to its lowest level since February 2009 as the Sterling opens noticeably stronger this morning against both the Australian Dollar (1.5421) and the New Dollar (2.0045)

We expect a range today of 1.5310 – 1.5520

Majors:

Spot Gold prices advanced, US Treasuries gained and the US Dollar also finished stronger yesterday amid concerns Europe’s Bailout package will unravel. In what proved to be a session of safe-haven trades global equity markets also took a large hit with the S&P 500 finishing 2.4 percent lower. As has been the driving influence over the weeks just passed it was again news out of Greece which triggered losses as Greek Prime Minister George Papandreou’s grip on power weakened following his announcement to take the Euro Zone’s most recent bailout package to referendum. Following the announcement the EURO was immediately sold across the board and after trading to an eventual low of 1.3607 against its US Counterpart it opens a full cent and a half lower this morning at a rate of 1.3706. On the EURO front, volatilities are expected to continue in the coming weeks as the ultimate danger in a referendum lies within the fact it could be defeated with Greece potentially back to square one and facing the distinct possibility of default. Meanwhile in the US overnight the Greenback rallied against the Japanese Yen, opening stronger this morning at a rate of 78.325 with all eyes on the Open Market Committee due meet this evening.

Data releases

AUD: Building Approvals m/m,

NZD: No Data Today

JPY: Monetary Policy Base y/y

GBP: Construction PMI

EUR: German Unemployment Change, Final Manufacturing PMI

USD: ADP Non-Farm Employment Change, FOMC Statement, Federal Funds Rate, FOMC Press Conference

After an extended rally on Friday evening the Australian Dollar consolidated well in early morning trade reaching an eventual high of 1.0715 against its US Counterpart. Such advances above the 1.07 level were short-lived however with the Nations Currency being sold across the board throughout the afternoon reaching a 24 hour low of 1.0505. Driving the Aussie Dollar lower yesterday reflected the Bank of Japans decision to intervene in the currency market in an attempt to weaken the Yen as a stronger currency hurts the nations highly relied upon export industry. Following the intervention the Australian Dollar lost a full one and half cents, with the US Currency being the major benefactor.   Looking ahead today, in what is shaping up as of one of the most highly anticipated interest-rate decisions in recent times; investors remain split as to whether The RBA will reduce the official cash rate from 4.75 percent with domestic price pressures ebbing of late.

We expect a range today of 1.0420 – 1.0600

New Zealand Dollar:

The New Zealand Dollar opens noticeably lower this morning currently buying 80.83 US Cents. In what was another busy session for the Kiwi, the Nation’s Currency traded as high as 0.8226 against its US Counterpart earlier in the day before Japans Central Bank stepped into the currency market in an attempt to weaken the Japanese Yen after it hit a fresh post World-War II high of 75.35 per US Dollar. With the US Dollar rallying considerably and the euphoria over Europe’s latest debt package starting the fade, attention is likely to remain on Central Banks this week with the US Federal Market Open Committee due to meet on Thursday to discuss the potential for further quantitative easing.  Looking ahead today the 80 US Cents level is again likely to be tested with an interest rates decision expected out of Australia

We expect a range today of 0.8010 – 0.8140

Great British Pound

In what can only be described as a roller-coaster ride for the Great British Pound yesterday the Sterling opens around half a cent lower this morning currently trading at a rate of 1.6083 against its US Counterpart. With UK Stocks tumbling the most in five weeks, the FTSE 100 retreated 2.8 percent as investors nervously await the inner details of how Europe plan to fund its extended bailout facility. Looking ahead this week news flows out of Europe are again likely to dominant the short-term direction of the Sterling with G-20 members due to meet at a summit on Nov 3, it appears the initial rally witnessed throughout markets last week may of been a little overdone. Meanwhile this morning the Sterling opens stronger against a weaker Australian Dollar at a rate of 1.5253

We expect a range today of 1.5150 – 1.5350

Majors:

In Major news throughout currency markets yesterday Japan’s Central Bank stepped into sell the Japanese Yen, after the Yen hit a fresh post World-War II record of 75.35 per US Dollar. With the US Dollar being the major benefactor, Japans interventions are expected to continue in the coming months with a historically high Yen harming the competitiveness of the nation’s exporters. In unrelated news overnight global equities lost between 1.5 – 2.5 percent with investors becoming increasingly frustrated that further details regarding Europe’s latest debt package are not-forthcoming. With concern growing that European Leaders will struggle to raise the funds to contain the regions debt problems the EURO traded as low as 1.3827 against its US Counterpart, opening this morning a full 3 cents lower from its earlier highs at a rate of 1.3827. Looking ahead this week volatilities are expected to continue , with last weeks optimism and subsequent rally appearing to be of overshot the mark, the buying stampede looks contained in the short-term with further details required to outline exactly how Europe plan to finance their latest debt-resolution proposal.

Data releases

AUD RBA Cash Rate Decision, AIG Manufacturing, HIA New Home Sales m/m, Commodity Prices y/y

NZD: ANZ Commodity Prices m/m

JPY: Monetary Policy Meeting Minutes, Average Cash Earnings y/y, BOJ Gov Shirakawa Speaks,

GBP: Halifax HPI m/m, Manufacturing PMI, Prelim GDP q/q, Index of Services 3m/3m

EUR: French and Italian Bank Holiday

USD: ISM Manufacturing PMI, Construction Spending m/m, ISM Manufacturing Price

New Zealand Dollar: The kiwi hit a 5-week high of 0.8240 during trade last Friday before profit-takers pounced taking the unit down to an intraday low of 0.8175 against its US counterpart. Earlier, the kiwi surged US2 cents after European Union leaders agreed to a deal to solve the Euro zone debt crisis. The currency opens at 0.8212 and may run out of steam around this level for the time being given the speed and force of what can only be described as a “relief rally”. The kiwi continues to be outperformed by its trans-Tasman rival, opening at 0.7690 today after hitting a low overnight of 0.7640.

We expect a range today of 0.8140 to 0.8225

Great British Pound: The euphoria displayed by markets late last week in light of the EU deal to solve the Euro zone debt crisis dimmed somewhat during trade on Friday taking Pound Sterling higher against both the Euro (0.8760) and the greenback (1.6100). The Euro weakened slightly after Italys borrowing costs rose at a debt sale. Sterling has gained on the greenback for the third consecutive week mainly on recent developments out of Europe rather than any underlying improvement in the domestic economy. Consumer confidence remains at a 2-year low as Britons become more pessimistic about spending. Meanwhile, the pound opens largely unchanged against both the Australian Dollar (1.5040) and the New Zealand Dollar (1.9625).

We expect a range today of 1.5010 to 1.5110

Majors: The Euro advanced for a third consecutive week against the greenback and opens the new week at 1.4130. The 17-nation currency moved above the 1.4000 level for the first time in almost 2 months after European Union leaders agreed to a deal to solve the Euro zone debt crisis. During trade on Friday however, the Euro moved to a low of 1.4110 after Italys borrowing costs rose at a debt sale. Weighing on the greenback near-term is this weeks Federal Open Market Committee meeting where discussion may include consideration for a third round of quantitative easing. Whilst recent economic data in the United States is showing some signs of heading in a more positive direction, unemployment remains stubbornly high. Meanwhile, the greenback opens lower against the Japanese Yen at 75.50.

Data releases

AUD: Private sector credit, Sept

NZD: No data today

JPY: Housing starts, Sept

GBP: Mortgage approvals, Sept

EUR: Euro zone unemployment rate, Sept

USD: No data today

We expect a range today of 1.0320 – 1.0450

New Zealand Dollar: After trailing to lows of 0.7920 on European uncertainty, the monthly meeting of the Reserve Bank of New Zealand has just given the nation’s currency the lift it needed. While most central banks are talking of rate-cuts to combat a global slowdown the Kiwi’s central bank governor stated that, so long as the effect on their country was mild, domestic strength will likely require future interest rate hikes. The New Zealand Dollar has moved 0.8% higher on the RBNK’s hawkish tone to break resistance at 0.8000 and consolidate just above at time of writing. Interest rate expectations has also helped the Kiwi recover some recent ground lost against the Australian Dollar and it has fallen below 1.3000 to 1.2980 (0.7700).

We expect a range today of 0.7920 – 0.8040

Great British Pound: Sterling has broken five days of gains on disappointment following the much anticipated second EU summit yesterday. EU leaders failed to deliver the promised comprehensive debt plan and the British Pound fell from levels above 1.6000 when it was clear we would have to wait longer for details. Cable saw lows near 1.5890 although the strategic release of a few key points relating to the recapitalisation of banks helped ease investor concerns and the Pound recovered to trade at 1.5970 this morning. Continuing uncertainty means Sterling is also higher this morning against the Australian Dollar (1.5360) however a hawkish RBNZ meeting sent the GBP/NZD below 2 cents to 1.9930.

We expect a range today of 1.5300 – 1.5420

Majors: The markets will now have to wait until next month for answers as EU leaders once again kick the proverbial can down the road. Despite a promise by key figures from France and Germany, details of a critical plan to get Europe’s debt back on track are now due to be finalised at the earliest during the next G20 meeting on the 3^rd/4^th of November. The Euro dropped from 1.3960 to 1.3800 on the initial disappointment however it managed to reclaim some ground to 1.3900 as clarity was provided surrounding the planned recapitalisation of Europe’s banks. The Japanese Yen flirted once again with record levels on the uncertainty however threat of an intervention by the Bank of Japan in the near future kept the Yen off these highs, just as the central bank is scheduled to begin its two-day monetary policy meeting. The safe-haven pair currently trade at 76.25.

Data releases

AUD: No data due for release

NZD: Official Cash Rate; Trade Balance

JPY: Monetary Policy Meeting

GBP: CBI Realized Sales

EUR: German Prelim CPI m/m; M3 Money Supply y/y

USD: Advance GDP q/q; Unemployment Claims; Pending Home Sales m/m

New Zealand Dollar:  The growth of consumer prices slowed to 0.4% over the past 3 months, after a 1% growth that was posted in the second quarter this year. This worse than expected CPI figure dampened interest rate expectations for tomorrow’s meeting of the RBNZ and caused the New Zealand Dollar to be amongst the worst performers of the day. Dropping almost 40 points immediately upon release, a general move away from riskier currencies mean the Kiwi continued along the downward path. Touching as low of 0.7950 by the North American session, we open this morning just off these lows at 0.7960. Also losing ground against the Australian dollar, the pair has moved through 1.3000 (0.7692) for the first time in almost 4 months, trading this morning near 1.3090.

We expect a range today of 0.7890 – 0.8100

Great British Pound: The Great British Pound remains on the precipice of 1.6000 as it waits for the outcome of this evening’s meeting to forge direction. The Bank of England’s governor Mervyn King addressed the parliament’s Treasury Select Committee on Tuesday about the Bank”s recent decision to launch a fresh round of quantitative easing, stating the decision was almost made a month earlier. He also encouraged incentives to make it easier for banks to lend to SME’s (small and medium enterprises). His words, supporting risk sentiment very slightly, along with an increase in the Current Account balance for the second quarter of this year meant Cable rose to highs near 1.6020 before falling to open this morning at 1.5990. Gaining some modest ground back against it’s antipodean counterparts the GBP/AUD trades at 1.5340 and the GBP/NZD at 2.0080.

We expect a range today of 1.5190 – 1.5400

Majors: A deterioration of US Confidence has boosted demand for safe-haven assets after the monthly survey reported its lowest levels since March 2009, a time when the United States was in recession. The Japanese Yen touched record lows against the Greenback, hitting 75.74, although speculation the Bank of Japan are looking to increase monetary easing at its monthly meeting this week caused the Yen to pare some of these gains. Markets are now in a ‘wait-and-see’ mode in the lead up to this evening’s critical EU summit, where anticipation of a golden plan is running high. The Euro remains in range-bound trade around the 1.3900 handle and the Yen holds stoically below key psychological levels at 75.90.

Data releases

AUD: CPI q/q

NZD: NBNZ Business Confidence

JPY: CSPI y/y

GBP: CBI Industrial Order Expectations

EUR: EU Economic Summit;

USD: Core Durable Goods Orders m/m; New Home Sales

We expect a range today of 1.0410 – 1.0520

New Zealand Dollar:  Positive economic data from China gave the New Zealand Dollar the boost it needed to break through the 80 cent handle during local hours yesterday. With fears of a hard-landing for China easing, a rally in commodity prices ensued and thus the Kiwi consolidated comfortably above 80 cents. Uncertainty surrounding Europe’s second summit on Wednesday will keep a lid on any risk rallies before then although New Zealand’s dollar does have local CPI data this morning to look to for any clues as to the RBNZ meeting scheduled for Thursday. Higher than expected consumer price inflation for the previous quarter will boost speculation of an interest rate hike and thus would be positive for the New Zealand Dollar. Opening this morning the Kiwi trades at 0.8070 against the Greenback and 0.7710 against the Aussie.

We expect a range today of 0.8030 – 0.8110

Great British Pound: The Great British Pound has briefly touched $1.60 against the US Dollar overnight as hopes build for a decisive and positive plan to emerge from the Euro zone on Wednesday. Gains afforded by the current market situation have been limited towards the Pound however as many remain concerned for the effect of the European turmoil on growth of the UK economy. Contraction of manufacturing and services sectors in Europe has once again highlighted fears the economic pull-back will also hinder UK growth. This morning Sterling sits just below 1.6000 at 1.5990 and exposure to the Euro-zone has pulled the Pound back against the Aussie and Kiwi, where it trades at 1.5260 and 1.9800 respectively.

We expect a range today of 1.5200 – 1.5340

Majors: Optimism is continuing to build in relation to tomorrow’s second European summit as investors use more and more clues to refine their expectations. The Euro rallied to a six-week high of 1.3950 by the close of the Asian session however worse than expected PMI data for the region along with concerns for the level of Greek haircuts being considered by the European Union knocked the single currency down from these highs to nearly touch 1.3820. Surveys showed both the manufacturing and services sectors in Europe contracted more than expected, and as last month’s figures told the same story, investors are becoming more and more wary of the risk of recession. The earlier release of positive Producer Price Index (PPI) from China did help balance these fears however as continuing growth from the world’s largest emerging economy helped balance these fears. Opening today the Euro is trading at 1.3920 against the Greenback and the Japanese Yen remains strong ahead of its central bank meeting this week at 76.05.

Data releases

AUD: CB Leading Index m/m

NZD: CPI q/q

JPY: No data due for release

GBP: Current Account; BBA Mortgage Approvals

EUR: GfK German Consumer Climate; Belgium NBB Business Climate

USD: CB Consumer Confidence; S&P/CS Composite-20 HPI y/y