NZD: The kiwi changed its tune going into the Euro session yesterday evening erasing earlier losses after improved demand for European bonds eased concern the region’s debt crisis is worsening, increasing investor appetite for currencies linked to growth. The kiwi started the session at 0.7179 to reach a high of 0.7238 around 7am this morning. The kiwi is currently trading just of its highs at 0.7228. We have quarterly Manufacturing sales out at 10:45 this morning which is not expected to move the market, however we could get dragged along with the Aussie at 1:30 as they release their employment data.

AUD: The Australian dollar reached its strongest levels in four weeks before a report this afternoon is forecast to show employers added positions again for a sixth month, which in turn increases the pressure on the central bank to resume raising interest rates. The Aussie reached a high of 0.9192 around 3am this morning on the back of improved demand for Portuguese and Polish bonds which helped ease investor fears around the globe. The Aussie is currently trading just off its overnight highs at 0.9177. We have some potential market moving data out at 1:30 this afternoon with the Unemployment Rate expected to improve 10 basis points to 5.2%. Anything lower than this could potentially send the Aussie northward.

EUR: The EUR rose slightly during the overnight session trimming losses, at one stage down at 1.2658 after the release of the FED’s beige book about current economic conditions. Euro remains broadly weak against the majors, pressured by a WSJ report that the European bank stress test ‘understated some lenders\' holdings of potentially risky government debt. Still trading in a range near the daily lows it has been moving between 1.2712 and 1.2760. Currently trading at 1.2720 at the open this morning, no Euro data out tonight.

GBP: GBP started the day at 1.5375 its low and quickly broke above 1.5500 jumping to 1.5530, hitting the highest price since August 30. An improvement in market sentiment following a solid demand at an auction of Portuguese government bonds is fueling risk appetite that favors the Pound against the Dollar. House Price Index printed better than expected at 0.2% (-0.3% expected) giving some much needed support for the GBP. Later in the day Manufacturing Production data published as expected at 0.3%. Official Cash Rate out tonight 11pm NZT, no change expected.