Australian Dollar: The steep up and down movements in the Australian Dollar in recent days make the French Alps look like the Nullarbor Plain. The currency dropped one US cent yesterday down to an intraday low of 1.0115 seconds after the release of the July jobs report.

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The unemployment rate shot back up to 5.1 per cent after 22,000 full-time jobs were shed as downbeat consumer confidence and the weak retail sector reduces pressure on the Reserve Bank to lift official interest rates. Along with ongoing global growth concerns, speculation of at least one interest cut before the end of 2011 has sent the Aussie plummeting over the last two weeks from the post-float high above 1.1000.

During Thursday’s Asian session, the Aussie recaptured the jobs data-related losses to hit a high of 1.0275. During offshore trade the unit rallied to a high of 1.0358 ahead of this morning’s opening level of 1.0340.

We expect a range today of 1.0260 – 1.0420

New Zealand Dollar: The New Zealand Dollar rallied sharply during yesterday’s Asian session after local consumer confidence rose to a 7-year high of 113.3 points for the month of August. It was a positive sign for the local economy amid investor concerns over global growth which has seen currencies such as the Aussie and the kiwi fall as much as 10 per cent over the last two weeks from their recent lofty peaks.

The kiwi hit a high on Thursday of 0.8260, however ran into sellers before heading into the European session around the US82 cent mark. During offshore trade the unit hit a high/low of 0.8333 as the recent volatility shows no sign of abating. The kiwi opens at 0.8310 against the greenback and 0.8020 against the Aussie.

We expect a range today of 0.8240 – 0.8400

Great British Pound: Pound Sterling (1.6229) strengthened against the greenback overnight after UK Chancellor of the Exchequer George Osborne re-affirmed the government’s commitment to fiscal stability.

The pound rallied to an intraday high of 1.6238 from a three-week low earlier in the session of 1.6110. There has been widespread opposition to the government’s deepest spending cuts since World War II.

Keeping a lid on the pound however is The Bank of England’s bleak outlook for the economy which grew 0.2 per cent in the second quarter. Meanwhile, the pound opens weaker against both the Australian Dollar (1.5680) and the New Zealand Dollar (1.9540).

We expect a range today of 1.5580 – 1.5715

Majors: Another day of large swings on equity markets – this time back into positive territory – has seen the Swiss Franc (USD/CHF 0.7624) fall sharply amid overnight moves by investors into currencies linked to risk. Prior to last night, the Franc had rallied 9 per cent against a basket of currencies.

In the United States, weekly jobless claims unexpectedly declined to a four-month low of 395,000 pushing the greenback higher. The gains were short-lived and a risk rally took the Euro (1.4220) from an overnight low of 1.4102 to high of 1.4293. Meanwhile, the US dollar opens little-changed against the Japanese Yen at 76.75.

Data releases

AUD: no data today

NZD: no data today

JPY: Industrial production, June

GBP: no data today

EUR: Euro Zone Industrial Production, June

USD: Retail Sales, June; Uni of Michigan Confidence, August