[LFX]

Overnight we saw USD selling continue on decent flows. AUD and NZD led the rally against the USD as we saw a strong CPI print out of New Zealand and a hawkish speech from RBA governor Stevens who said that the RBA can’t be too timid in raising rates. AUD rallied to take out the 0.92 barrier level and we saw other currencies follow as the GBP and EUR both rallied against the USD..

GBP took out the 1.6125 level triggering stops that took the cross higher and EUR broke above the 1.4950 barrier level. 1.50 remains the key level on the topside to watch as it is both technically and psychologically important. We will see a deeper Dollar trough but the Dollar will start to recover in 2010 on the back of an improving BBoP situation. On the data front today key to watch will be the US CPI and US manufacturing data.