Australian Dollar: The Australian Dollar was supported on Friday after the Governor of the Reserve Bank Glenn Stevens was reasonably upbeat on Australia's economic prospects during a speech to a parliamentary committee.

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Mr Stevens indicated that while there was certainly room to cut rates if the global economy took a turn for the worse, he does not envisage that for the time being. Markets have trimmed considerably the odds of a cut in rates at the September 6 board meeting. The Aussie rose sharply from 1.0430 against the greenback to US105 cents where it entered offshore trade.

The Aussie ascent continued late in the New York session hitting a 10-day high of 1.0592 on risk appetite after US Federal Reserve chairman Ben Bernanke said the recovery was likely to improve in the second half of the year.

We expect a range today of 1.0515 to 1.0600

New Zealand Dollar: The New Zealand Dollar finally broke through resistance at US83 cents on Friday as it followed a stronger Aussie higher during Asian trade. The kiwi remained well supported after some strong local economic data late last week in the form of better-than-expected retail sales and consumer confidence.

The kiwi hit fresh 10-day highs against the greenback above 0.8400 late in offshore trade on risk appetite after US Federal Reserve chairman Ben Bernanke said the recovery was likely to improve in the second half of the year. However, further resistance looms for the kiwi around the 84 cent mark and some consolidation is expected today after Fridays one-and-a-half cent range.

We expect a range today of 0.8345 – 0.8425

Pound Sterling (1.6350) recovered some lost ground late in the session after falling to a two-week low of 1.6207 against its US counterpart. Economic growth in the United Kingdom slowed to 0.2 per cent in the second quarter, from 0.5 per cent the previous three months, dampening the case for the central bank to raise interest rates. The soft data came just one day after the release of consumer confidence which dropped to a 3-month low in July. Greenback weakness across the board and a move back into risk assets late in the session pushed the pound to a 24-hour high of 1.6362. Meanwhile, the pound opens weaker against both the Australian Dollar (1.5460) and the New Zealand Dollar (1.9450)

We expect a range today of 1.5400 – 1.5500

Majors: The greenback opens weaker across the board and stocks rallied late on Friday after US Federal Reserve Chairman Ben Bernanke indicated the economy does not require any further stimulus at this stage. Mr Bernanke stuck to his recent view that the recovery is likely to gather pace in the second half of this year.

The speech on Friday to central bankers and economists did not go into detail as to what stimulus measures the Fed has up its sleeve, should they be required, however Mr Bernanke mentioned that a second day has been added to next months Federal Open Market Committee meeting to "allow further discussion" of the economy.

Despite data on Friday revealing the US economy is growing at a sluggish 1 per cent annual pace, markets took on board risk late in the session which saw the Euro rally from 1.4340 to a 24-hour high of 1.4500. The dollar also weakened against the Japanese Yen opening at 76.70 this morning.

Data Releases

AUD: New Home sales, July

NZD: No data today

JPY: No data today

GBP: No data today

EUR: Italian Consumer Confidence, August

USD: Pending Home sales, July