:: Australian Dollar: Despite more strong local economic data in the form of CAPEX yesterday the Aussie dollar struggled during the majority of the Asian session drifting lower from the days open around 0.8280 to exchange as low as 0.8240. Offshore investors, buoyed by better than expected European and U.S economic data took the opportunity to snap up Aussie dollars, taking it back towards 84 cents. This morning sees the AUD open near 84 cents against the Greenback as analysts eye a big week for Australian data releases next week. Technical resistance between 0.8420 and 0.8475 holds the key to the longer term direction for the Aussie dollar and with some analysts revising upwards expectations for GDP it remains a distinct possibility that a test of these levels is imminent over coming days.

- We expect a range today in the AUD/USD rate of 0.8350 to 0.8425

:: Great Britain Pound: Investors seemed puzzled by conflicting signals on the U.K economy overnight with Nationwide House Prices exceeding expectations of a 0.5% rise in August to gain 1.6% whilst sales volumes at UK retailers unexpectedly fell in August. The Pound Sterling slowly drifted lower to test 1.6150 only to rally hard during U.S trade following better than expected economic growth data out of North America. With risk sentiment improving traders chasing higher yields dumped the Greenback taking GBP/USD as high as 1.6300. There was no such relief for those looking to convert Pounds into Aussie dollars as the AUD once again outperformed to take the cross rate to new lows around 1.9350.

- We expect a range today in the GBP/AUD rate of 1.9325 to 1.9425

:: New Zealand Dollar: The Kiwi drifted lower during yesterday's local session despite a stronger than expected Trade Balance in July. The New Zealand trade deficit decreased from 480 million NZD to 163 million yet the NZD/USD exchange rate fell throughout the Asian day to enter early London on its lows at 0.6775. For the third time this week the Kiwi tested 69 cents and opens this morning within close range at 0.6870 following better than expected U.S GDP and Personal consumption data which buoyed sentiment on the global recovery.

- We expect a range today in the NZD/USD rate of 0.6835 to 0.6905

:: Majors: A stronger than forecast preliminary reading on German inflation data for the month of August added some support around 1.4250 to the Euro in early offshore trade. Investors however were keenly anticipating the release of key U.S economic data in the form of GDP and Personal consumption for Q2 this year. The market was caught by surprise at the resilience of the economy as both indicators exceeded economist forecasts. Economic growth was expected to be revised down from -1% to -1.5% but remained unchanged at -1% which, along with a smaller than predicted fall in Personal Consumption, triggered a massive rally in EUR/USD. The big dollar weakened almost immediately following the announcements with the Euro rallying from 1.4265 to trade above 1.44 for the first time in several weeks as risk appetite re-emerged for the first time this week. The news also sparked some selling in USD/JPY which slid to an overnight low of 93.20 but opens this morning slightly higher at 93.50.

:: Data Releases:

  • AUD: No Data Expected today
  • NZD: Jul Building Permits
  • USD: Jul Personal Income, Jul PCE & Aug Forecast Uni of Michigan Confidence
  • GBP: Q2 prelim GDP
  • EUR: Aug Confidence data
  • JPY: Jul Jobless rate, Jul Household Spending & Jul National CPI
  • CAD: Q2 Balance of Payments, Jul Industrial Product Price & Jul Raw Materials Price Index
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