Daily Forex Commentary Aug 31

:: Australian Dollar: The Australian Dollar begins the new week at 0.8410 but has yet to assert itself above the US84 cent mark. The Aussie rallied throughout most of last Friday's domestic session amid market speculation of an interest rate rise in November. The unit hit an overnight high of 0.8470 as equity markets in Asia and Europe gained ground. The sharp move higher was short-lived however as stocks on Wall Street retreated after a downbeat U.S. consumer sentiment report which left most traders guessing as to the underlying health of the global economy. Meanwhile, the Aussie remains strong on the cross rates, in particular against the Pound which is currently trading at 0.5160 - a 13-year high.

- We expect a range today in the AUD/USD rate of 0.8360 to 0.8460

:: Great Britain Pound: Pound Sterling opens largely unchanged (1.6272) on Monday against its US counterpart. The pound was supported on news the UK economy contracted less than previously estimated. Gross Domestic product fell 0.7 per cent in the second quarter, less than the 0.8 per cent calculated last month pushing the pound to an overnight high of 1.6380. Meanwhile, the pound is weaker against the Australian Dollar (1.9320) and marginally higher against the kiwi at 2.3790.

- We expect a range today in the GBP/AUD rate of 1.9200 to 1.9410

:: New Zealand Dollar: The New Zealand Dollar opens lower on Monday at 0.6835 after yet another failed attempt to break through US69 cents - a level not seen since September last year. Over the last four sessions, the kiwi has 'topped out' at 0.6896, 0.6894, 0.6893 and 0.6893. the local unit was supported on Friday after a lift in new building approvals which came in at 1,214 in July - the highest level in almost 12 months. The kiwi remains strong on the cross rates, most notably against pound sterling which is at a 12-year high of 0.4200.

- We expect a range today in the NZD/USD rate of 0.6790 to 0.6880

:: Majors: The Euro opens slightly lower at 1.4290 against the greenback after failing to hang onto gains made earlier in the session. Signs the 16-nation Euro region is emerging from the deepest recession in six decades came in the form of a rise in August executive and consumer confidence to 80.6 from 76 in July. The rise was bigger than expected pushing the Euro to an intraday high of 1.4387. Meanwhile, the big dollar opens at 93.28 against the Japanese Yen after unemployment in Japan rose to a record high of 5.7 per cent and consumer prices dropped 2.2 per cent as concerns mount that the world's second-largest economy is stalling under the grip of deflation.

:: Data Releases: