Euro hit 1.3457 against the Greenback

*Australian Dollar*: The Australian Dollar opens this morning buying
0.9894 US Dollars. The Queensland floods still remain the focus for
investors as the cost of the dictator start to weigh in. Insured
losses may cost as much as $6 billion for insurers worldwide according
to Munich Re, the world's largest reinsurer. Offshore the Aussie
tumbled more than 100pts after the PBOC made a surprise move to
increase its reserves ratio requirement by yet another 0.50% in its
battle to curb its steadily rising inflation. The hike dampened FX
risk flows sending the Aussie down to a intraday low of 0.9855 after
opening offshore at 0.9980 US.
* We expect a range today of 0.9850-0.9950

*New Zealand Dollar*: * *The Kiwi continued its morning slide early
offshore to an intraday low of 0.7634 against the US Dollar following
China's announcement to increase reserve ratio requirements with the
PBOC by 0.50%. Unlike some other growth link currencies, the Kiwi
staged a comeback , reaching for 0.7700 US, after the latest US round
of economic figures pointed to some weakness in the American economy.
Demand and spending remained weak while cost pressure continued to
increase at a steady pace. A report from the University of Michigan
revealed consumer sentiment declined to 72.7 from 74.5 previously.
This morning the Kiwi opens at 0.7667 US.
* We expect a range today of 0.7600-0.7700

*Great British Pound*: Hot producer prices in the UK did little to
inspire the Pound which dipped to 1.5810 against the US Dollar upon
release. British producer price inflation rose 3.4%, outstripping
estimates of a 1.6% increase for December while housing prices fell
for the third month. Policy makers maintained their stationary stance,
leaving interest rates and emergency stimulus on hold last week as
they continue to measure the threats of rising unemployment and
inflation to the nation's recovery. Slack demand and increasing
costs in food and energy adding to the Bank of England's challenge
to contain inflation, which is expected to reach 4%. Disappointing US
data saw the Sterling rise toward 1.5890 US late in the evening.
Meanwhile the Pound opens this morning at 1.6036 versus the Aussie and
2.0685 against the Kiwi.
* We expect a range today of 1.5980-1.6103

*Majors*: The Euro hit 1.3457 against the Greenback early offshore,
its highest level in a month, fuelled by hawkish remarks from ECB
President, Jean Claude Trichet. China soon sucked away investor risk
appetite, increasing its reserve ratio by 0.50% yet again. The Euro
fell as low as 1.3313 US despite Euro zone inflation growing 2.2%,
exceeding the ECB 2% limit for the first time in 2 years. Meanwhile
the latest set of economic data from the US revealed demand in the US
remain weak, with core retail sales in December growing by only 0.5%,
US inflation on the on the other hand continued to build at 0.1%.
Dampened investor sentiment saw the Greenback rise to 83 Japanese Yen
throughout the evening.

*Data releases*
* *AUD:* Motor Vehicle Sales (DEC), MI Inflation Gauge
* *NZD:* REINZ Housing Price Index, Food Prices (DEC)
* *JPY:* No data today
* *GBP:* No data today
* *EUR:* No data today
* *USD:* No data today
Source: Fxstreet.com