NZD: The kiwi slid in line with US equity markets overnight, amid disappointment surrounding the release of the Federal Reserve minutes. While many Fed watchers had been expecting the central bank to inject funds into the sluggish economy, the minutes revealed the bank will only resume quantitative easing should the economic outlook weaken considerably. The news put a dampener on previous positive news from the Case-Shiller housing survey showing US house prices have gained over 4% this year. After bottoming out at 0.6964, the pair opens this morning at 0.6992 and is likely to look to Australian and offshore data and sentiment for direction.

AUD: Despite positive housing news overnight, US equities slipped and took risk based currencies such as the Australian dollar with them. The sour note in the market was reached following the release of the US Federal Reserve minutes suggesting that the central bank would only resume cash injections into the economy should the economic outlook weaken “appreciably further”. The move saw AUD/USD bottom out at 0.8863, before a slight bounce to this morning’s opening price of 0.8915. This afternoons release of GDP data will undoubtedly see movement in local trade.

EUR: The EUR/USD is surprisingly finding support where the general theme is risk aversion and European fundamentals improved a dovish case. Indeed, the EZ-CPI estimate slipped to 1.6% from 1.7% as expected, with the German unemployment change at -17K, short of expectations at -20K. The support could be attributed to the hawkish comments from ECB president Trichet at the Jackson Hole Conference, where he spoke against additional stimulus and encouraged countries to begin “absorbing liquidity”. Therefore, with the ECB rate decision ahead on Thursday we could start to see the pair consolidate as we approach the event risk. Currently trading at 1.2675.

GBP: Consumer credit, including personal loans, overdrafts and credit card lending rose 0.2B in July after falling 0.1B the previous month, while net lending secured on dwellings climbed a mere 0.1B amid economists’ expectations of 0.7B. Indeed, the report does not bode well for the U.K. as the slowdown in net lending secured on dwellings weighs on the housing market. Market participants will now shift their focus to the BoE rate decision which is expected to be released next week, September 9th. As of late, traders are pricing in a four percent chance that policy makers will hike rates twenty five basis points. The British pound has extended its decline against the greenback, and now looks poised to make a clear break below the 50-day moving average, currently positioned at 1.5350.