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Australian Dollar: Action rather than talk from an embattled Eurozone has led the Aussie higher overnight as investors covered short positions and flocked back to riskier assets. As speculation grew the European banks were to be granted a lifeline the Aussie rallied to a high of 0.9740, although cautionary words from Europe’s central bank president against a weakening economy sent it back down to 0.9630. Confirmation of the previously speculated loan program in a press release from the ECB help the Australian Dollar pare these losses and then some, finishing the session with highs of 0.9760. Opening this morning slightly lower at 0.9750 event risk remains offshore through until the end of the week, as employment data due out of the US this evening will either quell or fuel fears of a US recession.
 
New Zealand Dollar:  A wave of renewed risk appetite has boosted the New Zealand Dollar overnight after it spent the majority of the onshore session in a tight yet downward channel. Hitting a low of 0.7630 late in the Asian session it rallied early on in Europe to a high of 0.7720, and despite a brief pull-back returned to these highs by the end of the trading day. Opening this morning against a weaker Greenback at 0.7715 the Kiwi’s direction is likely to remain with risk sentiment for the reminder of the week. Looking at its counterpart across the Tasman, short-term strength in the Aussie has left the cross rate lower this morning at 0.7920.
 
Great British Pound: The Bank of England surprised the markets overnight by unexpectedly increasing the size of its asset purchasing facility, alongside the widely expected hold on interest rates. Britain’s monetary policy makers added an extra 75 billion pounds to the existing pool of quantitative easing funds bringing the total amount to 275 billion pounds. Sterling dropped against the majority of its major counterparts off the back of the news as Cable fell immediately from 1.5460 to 1.5280. A relief rally in the markets prompted by the ECB monthly meeting and US employment data did help the Pound recover some of its losses and this morning’s opening levels are back up at 1.5440. Already under pressure against the Australian and New Zealand Dollars, the BOE meeting did little to help and both currency pairs open lower this morning, at 1.5840 and 2.0000 respectively.
 
Majors: A long awaited relief rally has been witnessed overnight as investors were finally shown some tangible steps towards assisting the flailing Euro zone. The Euro dollar had weakened earlier in the session as the European Central Bank President acknowledged the region’s economy is facing “intensified downside risks.” Hitting a low of 1.3250, it was soon to leap almost 2 full cents against the Greenback as the ECB announced it would be setting aside a further 40 billion Euros of emergency loans for eurozone banks facing liquidity crises’. Coming at the same time as the ECB keeping rates on hold, amidst a degree of speculation a cut may be on the cards, the Euro rallied to 1.3440 as risk appetite was somewhat restored by the developments. Assisting in the relief was better than expected unemployment claims from the United States ahead of the all important monthly non-farm payrolls due this evening. With the Greenback softer across the board, the Japanese Yen also still remains near highs at 76.60 ahead of its central bank monetary policy statement also out today.
 
Data releases
AUD: AIG Construction Index
NZD: No data due for release
JPY: Monetary Policy Statement; Overnight Call Rate; Leading Indicators
GBP: PPI Input m/m; PPI Output m/m
EUR: German Industrial Production m/m; French Trade Balance
USD: Non-Farm Employment Change; Unemployment Rate; Average Hourly Earnings m/m