NZD: The greenback weakened across the board again last night helped by a better-than-expected New Home Sales report which sent the DJIA 100 points higher overnight. The kiwi smashed through the 0.7280/0.7300 resistance mark reaching a high of 0.7351 which was last seen mid January. Look out for US Consumer Confidence and the S&P House Price Index due out in early New York trade tomorrow. It would seem the kiwi market does not want to be caught short leading into the RBNZ release this Thursday. Kiwi opens at 0.7335.

AUD: Equity markets offshore to be the catalyst again this week for the Aussie as the stress tests have been and gone and investors have an increase for risk appetite. From a low of 0.8940 the AUD hit a high of 0.9034 overnight and has only pulled back marginally from there. The Conference Board Index out at 1200NZT the only data worth noting for the Aussie today, but only of medium importance. More importantly U.S Consumer Confidence out at 0100 to give direction for the risk currencies.

EUR: Uncertainties surrounding the results of the EU bank stress test initially pushed the Euro to a low of 1.2888 during early morning European trade. Despite the comments from European Central Bank board member Jose Manuel Gonzales-Paramo who said that the stress tests were very demanding and that he’s satisfied with the outcome as it reveals the strength of the European banking system, the market was not that convinced. Meanwhile, regulators in Germany, including the Bundesbank said they have no plans to conduct the stress test on a regular basis and argued that the time and effort it takes to implement such measures are not worth the insight gained from the investigations. As investors remain sceptical of the stress test, with market participants looking for increased clarification behind the procedure, concerns underlying the European banking system may continue to drag on the exchange rate. The euro still struggles to gain or hold above 1.3000, although at the time of writing we are not too far off, currently trading at 1.2992.

GBP: The British Pound extended the rally from the previous week, with the GBP/USD initially rallying to a high of 1.5507, and the pair looks poised to test the 200-Day SMA at 1.5561 as it maintains the upward trend from the June low (1.4346). Meanwhile, U.K. Treasury Minister Mark Hoban unveiled a new proposal where the Bank of England will obtain new powers over the financial system, which include oversight of banks and clearinghouses, and said the new unit within the BoE will meet at least four times a year to monitor risk and deliver consumer protection. As the economy struggles to brush off the recession, the BoE is widely expected to maintain a loose policy over the coming months, but the MPC may see scope to normalize policy going into the following year as the stickiness in consumer inflation becomes a increased concern for the central bank. GBP/USD currently trading back from the highs at 1.5485.