EURO continues to hold steady

*Australian Dollar*: The Australian Dollar dropped from 0.9890 to
0.9865 in quick fashion yesterday on the release of a weaker than
expected reading in Producer Price Index. PPI at the final stage of
production rose 0.1% compared with a forecast of 0.5% with import
prices being attributed as one of the key factors for the fall. During
the offshore the Aussie fared a lot better and traded between 0.9885
and 1.0019 as global equities gained spurring demand for riskier
assets. Today's release of CPI (Consumer Price Index) should provide
movement for the local unit with the forecast number to come above the
previous quarter on quarter reading.
* We expect a range today of 0.9900 to 1.0000

*New Zealand Dollar*: * *With Wellington enjoying a Public Holiday
(Anniversary Day) yesterday movements during local time for the Kiwi
were limited. During local time the NZ Dollar traded sideways (0.7560
to 0.7600) before tracking higher in the offshore session to hit an
intraday high of 0.7656 as a return to riskier assets took hold. All
eyes this week in New Zealand will be the RBNZ interest rate decision
and statement due out on Thursday with many expecting no change in
official rates but it will be the accompanying statement from Governor
Allan Bollard that will attract the most attention. Rates are not
expected to be raised in NZ until at July 2011.
* We expect a range today of 0.7580 to 0.7680

*Great British Pound*: The British Pound continues to hover around the
1.60 mark against the US Dollar but appears to be having some trouble
consolidating above this level. During the last 24 hours it has traded
between 1.5919 and 1.6013 as another day of Greenback selling took
hold in the market. Tonight's Preliminary GDP which is expected to
fall by 0.2% from 0.7% to 0.5% will be closely watched by market
participants, with a lower number having the potential for the Pound
to test 1.5900 and below. Against the Australian Dollar and New
Zealand Dollar the Pound is currently changing hands at 1.6030 and
2.0950 respectively.
* We expect a range today of 1.5900 to 1.6100

*Majors*: The EURO continues to hold steady against the Greenback as
investor confidence seems to be returning to the 16 nation currency.
Overnight the EURO traded to a low of 1.3539 and a high of 1.3680 as
mixed data out of France and Germany (Flash Manufacturing and Services
PMI) indicated that Europe is on the recovery track. Adding to the
positive EURO sentiment last night was news out of Spain about how it
would finance local bank debt in the area. The Federal Open Market
Committee interest rate decision and QE2 policy released Thursday is
the key release for the US Dollar this week however the market is
expecting no change in either strategies to place.

*Data releases*
* *AUD*: CPI q/q
* *NZD*: No Data slated for release
* *JPY*: Overnight Call rate and Monetary Policy Statement
* *GBP*: Prelim GDP q/q; Public Sector Net Borrowing
* *EUR*: GfK German Consumer Climate, French Consumer Spending
* *USD*: CB Consumer Confidence; HPI m/m; Richmond Manufacturing
Index
Source: Fxstreet.com