NZD: RBNZ day is here! All eyes will be on Governor Bollard today at 9.00am. Consensus seems to be rates will be hiked another 0.25% today but with all the other benign data around maybe he might indicate a pause from here-time will tell. Overnight the kiwi has followed the AUD lower although overall we are higher on the NZD/AUD cross. After hitting a low of 0.7255 we have bounced a little to open here at 0.7280. The market will be wary till the announcement.

AUD: Following the release of the AUD CPI yesterday afternoon the AUD dropped sharply. Official figures released showed CPI at 2.7% YoY and 0.6% QoQ which was well below expectations. From an initial fall to around 0.8920 it could only manage to rally to 0.8965 and has been tracking sideways ever since. It has touched a low 0.8907 from there and sits at 0.8935 as we go into the New York close. A surprisingly weak Durable Goods report initially spooked the market but the DJIA finished slightly in the red overnight but gave no real direction.

EUR: A bit of a lack-luster session for the Euro as it continues to be range bound. Still constrained by 1.3035 on the top-side and 1.2955 on the bottom. Not much to report as Portugals Govt auctioned some bonds in the 4 years and 13 years. Yields were higher but so are the 3month euro interbank lending rates. We can’t see much happening to break the range at the moment.

GBP: After yesterdays break higher in GBP it hasn’t exactly raced away to the topside. It posted an intraday high of 1.5639 during the morning session shortly after comments by Governor Mervyn King. He told MP’s that “there will come a point when we will certainly need to ease off the accelerator and return the ‘Bank Rate’ to more normal levels,” and went onto warn that high inflation will continue to erode power through next year as the economy faces the threat of “stagflation.” However since then Sterling has consolidated and eased back to 1.5595, no doubt having a breather after its strong run in the last week.