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The AUDNZD cross pair was boosted by Aussie major demand as the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />New Zealand dollar leg is looking to close almost unchanged for the session.  Helping along the Australian major is mild speculation of another 25 basis point rate hike by the Reserve Bank of Australia that could come as soon as the beginning of the fall.  Underlying fundamentals including inflationary pressures, a rebound in the housing market and higher upticks in manufacturing are boosting such notions.  The sentiment was especially sparked off in the overnight following a more than positive leading index of economic activity report.  For the month of May, economic activity rose at an annualized rate of 4.2 percent according to the Australia Westpac-Melbourne Institute.  Likely pointing to continued pace of activity in the next three to nine months, the report continues to purport a stronger economy coupled with previous reports.  Estimates are now expecting a healthy 3.5 percent rate of growth in the year as opposed to a 2.5 percent cycle low in the previous year of 2005.  However, todays base metal sector losses capped gains, which otherwise would be higher, as stronger speculative shorting brought the overall sector lower through the overnight.  With correlations still high with the Australian dollar, losses in copper and gold forced the major slightly lower.

EURJPY

In line with yesterdays comments, Federal Reserve Chairman Ben Bernanke led major markets higher as he retained a more dovish tone on the second day of a two day testimonial.  None more so than against the Euro, which was propelled when trading against the Japanese yen during the session.  With monetary tightening now shifting out of US dollar based assets, investors are likely to keep with the Euro as the European Central Bank is likely to keep raising rates to curb inflation in the coming months.  The notion is comparable to a Bank of Japan that is seen as dovishly in line with US central bankers, even as futures traders are pricing in two more probable rate hikes until year end.  This sentiment alone kept the Euro bid against the still relatively low interest bearing Japanese currency.  However, with the days run up in price, offers are imminently emerging in the Asian session with option defense likely to kick into effect just below the 149.00 figure at 148.50. Selling pressure is likely at the 148.00 figured, riddled along up to the 148.50.

GBPJPY

Similar to the EURJPY cross, GBPJPY cross pair was bid higher on the day heading into the anticipated gross domestic product figure.  Sparking off demand for the Sterling major was higher than expected retail sales figures.  Climbing double consensus figures, consumer interest  was reported at 0.9 percent higher than the 0.4 percent consensus vote.  The uptick now places the annualized figure at higher than 3.7 percent compared to a lower 2.5 in the previous month.  Ultimately this is a silver lining for the economy as consumer sentiment and consumption remain key concerns of policy makers, which are easing in two new board members.  Additionally, the figures are likely to contribute to a higher revision on the yearly growth figure, now at 2.5 percent, revised higher from the 2.3 percent in the previous reading.  Should overall growth increase, rate speculation is surely to follow in line with recent future sentiment of at least one more rate hike by years end.  With an already 450 basis point advantage against the Japanese yen, the carry trade continues to favor the sterling bull.