Australian Dollar
The Australian dollar finished last week overall weaker after falling to its lowest level in four weeks against its US Counterpart on Friday. Given ongoing concerns that Chinese growth is slowing, the flow on effects to the resources sector and what it means for commodity prices and the underlying value of the currency, investors took the opportunity to sell the higher yielding asset for much of Friday as it drifted to an overnight low of 1.0375 against the Greenback. With sentiment being somewhat dampened by question marks over the lifecycle of Australia’s commodity boom, the move lower happened despite a late session rally in US equities which was triggered by news that the ECB is considering a new bond-buying program. Meanwhile this morning the Australian dollar opens one third of a US Cent weaker, currently swapping hands at a rate of 1.0420

We expect a range today of 1.0370 – 1.0470

New Zealand Dollar
In what proved to a mixed session for the Kiwi on Friday, investors initially moved away from the higher yielding asset amid concerns that China’s growth is set to soften. With equity and commodity prices also heading south New Zealand’s dollar touched an overnight low of 0.8080 against its US Counterpart. Despite its sluggish start, the majority of early losses soon turned to gains with the shift in sentiment being triggered by further evidence that the US Federal Reserve has room to deliver additional monetary stimulus should the world’s largest economy need it. Whilst the ECB also discussed some fresh Policy options, overall investors liked what they heard. Clinging to the 81 US Cents level the New Zealand dollar opens this morning currently buying 81.22 US Cents

We expect a range today of 0.8080 – 0.8160

Great British Pound:
In a report released overnight Friday Gross Domestic Product fell 0.5 percent in the second quarter of this year, a figure in line with the majority of expectations. Highlighting the fact the British economy continues to be not only weighed down by the woes of its European neighbours but also the fiscal squeeze that has resulted locally. Whilst the BOE has recently cut growth projections Mervyn King has also left the door open to provide more stimulus in an attempt to increase economic activity. Following the announcement the Great British Pound fell to an overnight low of 1.5801 against its US Counterpart as it opens this morning around half a cent weaker at 1.5815. Unlike it sharp drop against the Greenback the Sterling remains relatively unchanged against both the Aussie (1.5174) and Kiwi (1.9463).

We expect a range today of 1.5120 – 1.5220

Majors:
Whilst the S&P 500 ended the week in negative territory for the first time in almost 2 months the mood across markets on Friday was overall positive. Making headlines on Friday the US Federal Reserve continued its verbal assurance that they do have room to provide further stimulus should the need arise, keeping in mind unemployment remains elevated at 8.3 percent and growth almost stagnant. Despite the likelihood that QE3 would in the longer-term weaken the Greenback, the dollar gained against 15 of its 16 major counterparties on Friday unlike the performance of the EURO which finished the session around half a cent lower against its US Counterpart at 1.2510. Meanwhile whilst in Europe it appears likely that the ECB will sit tight until Germany’s Constitutional Court Rules on the legality of Europe’s permanent bailout fund before they announce the full details of its plan to buy government bonds. With the implementation of specific bond-yield targets also remaining a distinct possibility markets are likely to remain jittering ahead of such decisions expected on the 12th of September.

Data releases

AUD:
No data today

NZD: No data today

JPY:
No data today

GBP: Bank Holiday

EUR:
German Ifo Business Climate

USD:
FOMC Member Pianalto Speaks