Australian Dollar: The Australian Dollar has established itself in range-bound trade early this week, a result of the hesitation market participants are showing in the lead up to the much talked about Jackson Hole summit later this week. Monday saw a high of 1.0470 and a low of 1.0360 and it is appearing likely we may become even more familiar with this range as the week progresses.

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A potential source of volatility later today is a speech due to be given by RBA Deputy Governor Ric Battellino, where investors will be watching closely for hints towards the next interest rate movement. Also of note is Chinese HSBC Flash Manufacturing PMI as the health of the Chinese economy is of pivotal importance to the health of our own. The Aussie failed to hold levels above 1.04 late in the North American session and opens today at 1.0390.

We expect a range today of 1.0360 – 1.0480

New Zealand Dollar: The New Zealand Dollar would have been one of the few currencies to gain ground on Monday after opening at lows near 0.8160. A move back towards riskier assets at the start of European trading hours helped the Kiwi to climb over a full cent to 0.8270, yet unlike many other riskier currencies it managed to hold on to a portion of its gains.

Opening this morning at 0.8230 vested parties will be watching New Zealand’s inflation expectation figures due out later today where a higher than expected reading will boost the likelihood of a potential interest rate rise. On the cross rates the Kiwi is also higher against the Australian Dollar and currently trades at 0.7920.

We expect a range today of 0.8160 – 0.8270

Great British Pound: In a very quiet start to the week the Pound Sterling sits a mere handful of points away from the week’s opening level. A momentary swing away from the safe havens saw the Pound break briefly above 1.6500; however ongoing uncertainty quickly reversed these gains and it fell back to establish a weekly low thus far of 1.6440.

Opening this morning at 1.6460 there is little in the way of data today with mortgage approvals the only expected release; however MPC member Martin Weale is due to speak at the International Statistical Institute Congress, in Dublin. Against the Australian and New Zealand Dollars, Sterling sits at 1.5830 and 1.9990 respectively.

We expect a range today of 1.5740 – 1.5890

Majors: With a lot riding on the Economic Symposium to be held in Jackson Hole later this week, currency markets are displaying cautious movement at best. The meeting, which will take place on Friday and Saturday, is attended by central bankers, finance ministers, academics, and financial market participants from around the world.

With Fed Chairman Ben Bernanke due to give a speech during the course of the event, many investors are waiting to hear what he has to say and whether he will signal additional measures to stimulate the struggling US economy.

After opening the week lower, the Euro found support at 1.4350 and despite a courageous rally to 1.4430 it find itself back at this support level this morning. Even the Yen and the Swiss Franc have made little movement, despite the imposing threat of intervention by their respective central banks. The Japanese Yen has maintained a very tight trading range primarily between 76.70 and 76.85 where it remains this morning at 76.80; the Swiss Franc losing a little ground opens at 0.7900.

Data releases

AUD: No data due for release

NZD: Inflation Expectations q/q

JPY: No data due for release

GBP: BBA Mortgage Approvals

EUR: Flash Manufacturing PMI; Flash Services PMI; German ZEW Economic Sentiment

USD: New Home Sales; Richmond Manufacturing Index