Australian Dollar: The Australian Dollar has held onto its recent gains and opens the new week at 0.8610. The Aussie closed higher on Friday after a range of positive Chinese economic data releases which boosted demand for the currency. Chinese industrial production and retail sales both beat expectations pointing towards strong economic growth. The local unit hit a new 12-month high of 0.8675 during European trade on Friday evening. Keeping a temporary lid on the currency is last week's weaker-than-expected local data which has dampened the likelihood of a near-term rise in official interest rates.

- We expect a range today in the AUD/USD rate of 0.8580 to 0.8680

Great Britain Pound: Pound Sterling opens higher today at 1.6690 after the Bank of England left its asset-purchase program on hold. The news that the so-called quantitative easing was not going to increase helped Sterling appreciate by 2 per cent over the course of last week. Also aiding the pound last Friday was another increase in UK producer prices (+0.2 per cent) for the month of August. Meanwhile, the pound opens higher against the Australian Dollar (1.9350) and steady against the New Zealand Dollar (2.3640).

- We expect a range today in the GBP/AUD rate of 1.9220 to 1.9400

New Zealand Dollar: The New Zealand Dollar has continued its recent ascent and opens on Monday at 0.7050. The kiwi hit a new 12-month high of 0.7088 on Friday night during early European trade. Despite recent rumblings by Reserve Bank Governor Mr Alan Bollard, the relentless rise of the kiwi continues amid improving risk appetite, rising stocks and commodities, and a weak greenback. The kiwi also remains strong on the cross-rates and is currently trading at 0.8183 against the Australian Dollar and 0.4220 against the Pound.

- We expect a range today in the NZD/USD rate of 0.6980 to 0.7120

Majors: The greenback is weaker across the board, in particular against the Japanese Yen, which opens at 90.28. The big dollar fell through support at 92.00 as economic data released on Friday showed that Japan's economy grew 0.6 per cent in the June quarter for an annualised pace of 2.3 per cent following a year-long contraction. The Yen advanced to a seven-month high of 90.64. Meanwhile, the Euro opens higher today at 1.4597, after reaching an overnight high of 1.4635 - a level not seen since December 18, 2008. Traders await tomorrow's release in the United States of inflation and retail sales data for further insights into the economic recovery.

Data Releases:

  • AUD: Lending Finance, July
  • CAD: Capacity Untilisation, Q2
  • EUR: EZ Industrial Production, July; Employment, Q2
  • GBP: No Data Today
  • JPY: Industrial Production; Capacity Untilisation, July
  • NZD: Retail Sales, July
  • USD: No Data Today

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