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Australian Dollar:  The Australian Dollar continues to be subject to rapid swings in investor sentiment, oscillating in a one cent range between 1.0270 and 1.0370. A sharp decline in Business Confidence as reported by yesterday’s NAB survey failed to give the Aussie the support it so required and despite reaching a session high near 1.0370 it was left vulnerable to offshore risk. As risk aversion spiked in the early hours of London trade, the Aussie Dollar dropped a full cent to lows just below 1.0270 however talks of a conference between French and German leaders helped placate investors. A recovery to 1.03560 followed and this morning we have settled to an opening level of 1.0310. Eyes will be on Westpac Consumer Sentiment figures as well as housing starts; not to forget the ongoing events in Europe.

 
New Zealand Dollar:  Offshore events has kept the New Zealand Dollar swinging primarily within the 82 cents range as local data, in the form of manufacturing sales, food and house prices, made little impact. Spending the onshore session around the 0.8220/30 mark, a sharp drop along with other riskier assets pushed the Kiwi to an intra-day low of 0.8185 by the beginning of European hours. A swing in sentiment helped the local dollar stage a recovery to 0.8265 before settling lower this morning at 0.8225. On the crosses the Kiwi is slightly higher against the Aussie at 0.7980.
 
Great British Pound: The British Pound opens near almost eight month lows this morning after the country’s Trade Deficit widened in the month of July. Posting an 8.69 billion shortfall of exports compared with imports, the figure was in line with the previous month however lacked the improvement investors were expecting. Sterling was also placed under pressure by ongoing concerns for the Euro-region and hence lows near 1.5760 were reached. A brief recovery helped along by a recovery in banking stocks did little overall as Cable has drifted back to establish opening levels this morning back near lows at 1.5780. Against the Australian and New Zealand Dollars it trades at 1.5300 and 1.9180 respectively.
 
Majors: The Euro opens this morning at the same levels it did 24 hours prior, although this is not due to a lack of information or quiet trade. The uncertainty of investors in relation to the ongoing Greek saga is clearly represented in the sharp and volatile movements in the currency markets and the EUR/USD is a prime example. Entering its local hours around 1.3680, a rapid drop was soon to be witnessed after German Chancellor Angela Merkel and French President Nicolas Sarkozy failed to announce joint initiatives on the region’s debt crisis, as speculation said they would. The single currency dropped 0.8% from 1.3690 to 1.3570 with pressure also being placed on the Euro by another disappointing Italian bond auction. Worries were eased soon after and the Euro pared its losses when it was announced that a phone conference will take place between Merkel and Sarkozy on Wednesday to discuss possible solutions. Also assisting the recovery was a bounce back in the shares of recently hard-hit French banks and this morning we are back at 1.3680. With little noise from Japan but ongoing risk aversion, the USD/JPY unsurprisingly opens this morning below the 77.00 handle at 76.90

Data releases
AUD: Westpac Consumer Sentiment; Housing Starts q/q
NZD: No data due for release
JPY: Revised Industrial Production m/m
GBP: Claimant Count Change; Average Earnings Index 3m/y
EUR: Industrial Production m/m
USD: Core Retail Sales m/m; PPI m/m; Business Inventories m/m