AUD/USD appears to be picking up pace to target Fibonacci resistance at 0.8900, and could rally to parity with the US dollar.

The number of Americans entering into contracts to buy previously owned homes during the month could prove to be more disappointing than expected, and prices of existing homes, which make up about 85 percent of the US housing market, likely have much further to fall.

On Monday, sentiment figures for the Euro-zone are expected to show dwindling confidence amongst consumers and businesses alike.

On Friday, the all-important US non-farm payrolls report will hit the wires, and while this release hasn’t been extremely market-moving in recent months, it may play a large role in the Federal Reserve’s next rate decision at the end of the month.

Futures markets show a 90 percent chance that the Fed will cut rates by 25bp, and this will continue to be reflected in price action in the FX, bond, and equity markets upon more evidence of deteriorating economic conditions.

With risks for the US economy vastly to the downside and the Federal Reserve still perceived as being dovish, the dollar remains susceptible to losses.

With Japanese wage growth faltering, retailers have little room to pass through the cost increases from food and energy. As a result, the price pressures that may be reflected in the December CPI readings are likely to fall back in coming months.

Business sentiment in Japan is likely to falter in the fourth quater as a stronger yen hurts exporters, and a global credit crunch increases borrowing costs and damages prospects for growth worldwide.

According to a survey of economists polled by Bloomberg News, expansion in New Zealand during the third quarter is expected to have cooled slightly to 0.4 percent after growing 0.7 percent during the second quarter.

The most market-moving piece of information from the BOE minutes will be the vote count, as just a few additional motions for a rate cut than traders are expecting could lead investors to ramp up speculation that the BOE will indeed make monetary policy more accommodative again in January.