Australian Dollar: The Australian Dollar has calmed somewhat after reaching record highs against the Greenback last week. Friday saw the release of Private Sector Credit for June and the numbers showed households are opting to save rather than borrow in what is still a fragile economic environment. This took some of the wind out of the Aussie's sales and combined with a degree of profit-taking on long AUD positions, our dollar trailed lower to eventually find support at 1.0910.

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Slower than expected growth of the US economy meant the Aussie was able to pare some of these losses by close of markets and we ended the week trading at 1.0985. Opening this morning, developments in the US Debt Ceiling debates has spurred a tentative demand for riskier assets and the Australian Dollar finds itself above 1.1000 for the moment. In what will likely be a volatile week with the RBA rate meeting also scheduled tomorrow, the Aussie faces a degree of uncertainty and looks heavy above the 1.10 level for the moment.

We expect a range today of 1.0960 - 1.1050

New Zealand Dollar: New Zealand building consents for June posted a 1.4% decrease on Friday and along with some squaring of NZD positions after last week's record highs, the Kiwi trailed lower throughout the course of the day. Moving from 0.8710 against the Greenback, the New Zealand dollar eventually touched a low near 0.8620 before disappointing US GDP pushed the pair higher once more.

In what seems almost common-place now the Kiwi once again reached new levels, breaking 88 cents against the US Dollar for the first time since the local currency was floated in 1985. Despite some minor set-backs spawning from risk sentiment, the Kiwi seems unstoppable and combined with speculation the RBNZ are more likely to raise interest rates we may not have seen the last of Kiwi's rallies just yet. In the cross rates, the New Zealand Dollar is also higher against its neighbour, buying 80 Australian cents.

We expect a range today of 0.8770 - 0.8850

Great British Pound: Despite a 0.2% increase in the UK's Nationwide House Price Index the Pound Sterling moved lower during Asian hours on Friday, falling from 1.6370 to 1.6265. However a sell-off of the Greenback following disappointing GDP figures meant Cable found some upward momentum and gained an impressive 1.2% to reach a high of 1.6470.

Unable to maintain these levels we open this morning at the 1.6400 barrier with markets eyeing Manufacturing PMI due out this evening. Against the Australian Dollar, the Pound is relatively unchanged from this time on Friday, at 1.4880 however with the Kiwi forging ahead the GBP/NZD sits at 1.8600 at the time of writing.

We expect a range today of 1.4840 - 1.4960

Majors: The Greenback has been relieved from recent lows as optimism grows that US lawmakers will reach an agreement on raising the nation's debt ceiling before the August 2 deadline. Before close of markets, the Yen rose to 76.90 against the US Dollar and the Swiss Franc forged further record highs at 0.7860 as economic growth for the world's largest economy disappointed the markets.

With GDP posting a 1.3% increase from last quarter, expectations of 1.7% growth added further downside pressure to the US Dollar. However many believe that developments over the weekend are a positive sign that a debt deal will be signed and that the deal may also be enough for US Bonds to keep their AAA credit rating.

With riskier trades being favoured off the back of this, we open this morning with the Euro at 1.4350, after touching 1.4400 briefly on Friday, and the Japanese Yen off highs at 77.50.

Data releases

AUD: AIG Manufacturing Index; MI Inflation Gauge m/m; HIA New Home Sales m/m

NZD: ANZ Commodity Prices m/m

JPY: No data due for release

GBP: Manufacturing PMI

EUR: Final Manufacturing PMI; Italian Monthly Unemployment Rate

USD: ISM Manufacturing PMI; Construction Spending m/m; ISM Manufacturing Prices

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