Asian trade was relatively light today as Japan was out on holiday. We did see the release of 2Q Australian PPI. Producer prices rose by 1.0% qoq which was less than the expected reading of 1.5%. This below consensus data is causing some to speculate that CPI on Wednesday may also come in below forecasts. AUDUSD traded firm despite dovish figures as it broke through trendline resistance, and looks poised for a test of the recent highs. The other majors traded rather quiet as consolidation seems to be the theme. EURUSD continues to trade between its 100 and 200 hr SMA's which currently come in at 1.5840 and 1.5875. USDJPY grinded in a 106.50-107.00 range, as the pair continues to benefit from recent strength in global equity markets.

Cable traded relatively heavy as a UK publication is reporting that the BOE super-dove Blanchflower stated that we will continuously vote for rate cuts, since he feels that the UK is either in a recession or headed for one. Cable is attempting to find support above its 200 hr SMA, which currently comes in at 1.9910 and EURGBP flirts with resistance up at the .7980 area. 2.0000 continues to offer stiff resistance for sterling and we continue to feel sellers with emerge in that area.