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Australian Dollar: The Australian Dollar staged a feeble rally to a high of 1.0260 onshore yesterday as it settled from the previous evening’s fall. A decrease in Business Confidence as reported by the NAB quarterly survey failed to give the Aussie the support it needed and swinging risk sentiment ultimately saw the Aussie head offshore at lows around 1.0150. A rally in risky assets early on in the European session, caused by the hope the EFSF will indeed help to solve Europe’s debt crisis, helped our local dollar to highs near 1.0280 although positive US Manufacturing data meant the Greenback was to claw back some of its losses. We open this morning at the higher end of current ranges with the Aussie buying 1.0240 US Dollars. Expecting a quiet session onshore, direction is sure to remain with investor sentiment as the market anticipates what this weekend’s summit between the European finance ministers will bring.
 
New Zealand Dollar:  Uncertainty in global markets has kept the New Zealand Dollar volatile although unable to make any decisive movements. Oscillating between 0.7880 and 0.7980, the Kiwi is likely to continue such movements however the upcoming EU Summit does leave the risky assets open to downside risk. Currently trading at 0.7925 against the Greenback, the New Zealand Dollar has little in the way of domestic risk events today; just Visitor Arrivals and Credit Card Spending data due for release. Against the Aussie, it hit a high of 0.7795 late yesterday afternoon before falling back to trade this morning at 0.7755.
 
Great British Pound: Movement in the Pound continues to be driven by the euro-zone, as does the movement of most currency pairs. Signs of disagreement amongst European Leaders over the European Financial Stability Fund sent Sterling lower initially to touch below 1.5700 however swings in sentiment saw a rally to 1.5800 before a fall back to these levels once more. On a domestic front, public sector net borrowing figures are due this evening although unless wildly skewed from expectations, focus is set to remain on Europe. Looking across to Australasia, the Pound is marginally higher against the Aussie and Kiwi at 1.5430 and 1.9900 respectively.
 
Majors: The currency markets continued to swing back and forth yesterday as uncertainty surrounding the European debt crisis continues. Nervousness that the impending summit of Euro Zone leaders on the 23^rdof October will disappoint dampened riskier assets during Asia as the Greenback pared some recent losses. The euro traded to a session low of 1.3680 before a Reuters report was released, outlining the potential capability of the European Financial Stability Fund should it be expanded. Soon after the report reached the news wires, the US Dollar was sold off across the board with the euro hitting a high near 1.3840 although the uncertainty of the summit date and the eventual scheduling of a second summit no later than Wednesday next week capped any gains. Across the Atlantic, the North American session contributed to market volatility also as Philadelphia Fed Manufacturing Index posted a more than impressive gain. Expanding from last month’s -17.5 to a positive 8.7, this report spurred the Greenback higher once again, taking the Euro back to session lows and the Japanese Yen briefly above 77.00. Markets have settled in for a breather in early Asian hours with EUR/USD at 1.3780 and USD/JPY at 76.85.
 
Data releases
AUD: Import Prices q/q
NZD: Visitor Arrivals m/m; Credit Card Spending y/y
JPY: No data due for release
GBP: Nationwide Consumer Confidence; Public Sector Net Borrowing
EUR: German Ifo Business Climate
USD: No data due for release