Australian Dollar: After an initial run lower towards 1.0660, the Aussie bounced back to life after the release of stronger-than-expected retail sales data – up 0.5 per cent following a 0.1 per cent fall in June. Shoppers came out of the woodwork in July, posting the first rise in sales in three months. The Aussie spiked to a high of 1.0720 and spent most of the Asian session above US107 cents.

The currency also received support from a strong rise of 4.9 per cent in new private capital expenditure for the June quarter. During offshore trade, the unit moved to a high of 1.0760 after better than expected manufacturing data out of the United States buoyed sentiment. There is no local data due today and the Aussie may be a little quiet compared to recent standards as markets await the release of tonight’s US employment data. We open on Friday at 1.0720.

We expect a range today of 1.0690 to 1.0755

New Zealand Dollar: Weaker than expected manufacturing data out of China capped any further gains on the kiwi yesterday. The currency slipped back towards US85 cents and spent most of the Asian session trading around this level.

During the offshore session, the unit traded between a low of 0.8472 up to a high of 0.8539 after better than expected manufacturing data out of the United States buoyed sentiment. There is very little on the local economic calendar at the moment and the kiwi is being driven largely by risk sentiment and offshore events. Meanwhile, on the cross rates, the kiwi opens weaker against the Aussie at 0.7920.

We expect a range today of 0.8480 to 0.8545

Great Britain Pound: Pound Sterling (1.6183) opens sharply lower today against its US counterpart. Undermining Sterling on Thursday was a report from the British Chambers of Commerce who have cut its UK economic growth outlook and said the Bank of England are likely to keep interest rates on hold until the second half of 2012. Adding to the gloom was separate report from Nationwide Building Society showing UK house prices declined the most in 10 months. The pound hit an overnight low of 1.6131. Meanwhile, the pound opens weaker against both the Australian Dollar (1.5080) and the New Zealand Dollar (1.9000).

We expect a range today of 1.5050 to 1.5110

Majors: The greenback rallied against several major currencies on Thursday after stronger-than-expected US factory data. The Institute for Supply Management’s manufacturing index came in at 50.6 last month compared to 50.9 in July. A reading greater than 50 indicates expansion which had investors scaling back expectations of a third round of asset purchases by the Federal Reserve aimed at stimulating the economy.

The Euro (1.4256) hit a two-week low of 1.4225 against its US counterpart after a manufacturing gauge in the 17-nation zone fell to 49 in August from 50.4 the previous month. Markets will tonight focus on US non-farm payrolls with estimates ranging from 25,000 new jobs in August up to 65,000 versus 117,000 in July.

Data releases

AUD: No data today

NZD: No data today

JPY: No data today

GBP: Purchasing Manager Index, Construction, August

EUR: Euro Zone Producer price Index, July

USD: Non-farm payrolls and unemployment rate, August