Australian Dollar
The Australian Dollar has remained flat for most of the past 24 hours with investors becoming seemingly obsessed with the notion of further Stimulus out of the US Federal Reserve. Whilst the higher yielding unit did move to an overnight high of 1.0397 against its US Counterpart the move higher was a short lived one after US GDP Figures came in slightly better than expected, hence weakening the argument in favour of a third round of quantitative easing. Given some relatively solid support has kicked in around the 1.0330 level, markets are likely to remain range bound and cautious ahead of the Jackson Hole Meeting this Friday. Opening this morning 30 basis points lower at 1.0342 Private Expenditure Figures as well as Building Approval data due out shortly is likely to have only a minimal influence on the Nations currency.

We expect a range today of 1.0300 – 1.0380

New Zealand Dollar
The New Zealand Dollar fell below 80 US Cents overnight for the first time since late July following the release of the Federal Reserve’s Beige Book which pointed towards gradual improvements within the world’s largest economy, adding to speculation that further stimulus remains far from a done deal. Given so much of the Kiwi’s direction has been dominated by comments out of both the ECB and the US Fed, markets having become somewhat blinded by other data releases choosing to focus solely on the hope of further liquidity from the Central Banks. Trading between a 24 hour range of (0.7995 -0.8056) against its US Counterpart the Kiwi opens broadly lower this morning at 0.8008. Meanwhile on the outlook today should Business Confidence be pointed higher in a report released this morning, the expectation would be a consolidation around the 0.8030 level

We expect a range today of 0.7960 – 0.8040

Great British Pound:
It was much of the same for the Great British Pound overnight as investors attention remained on both the ECB and the US Fed given the light economic docket locally. Whilst concerns surrounding the fragility of UK’s economy are likely to weigh on the Sterling in the medium-term, currency movements are likely to remain muted over the coming 24 hours, ahead of Ben Bernanke’s testimony on Friday. In overnight action the Pound traded between (1.5802 -1.5454) against the Greenback, consolidating well to open this morning there about at 1.5830. Meanwhile on the cross rate, the Sterling looks even more attractive against the generally weaker commodity backed currencies opening stronger against both the Aussie (1.5288) and the Kiwi (1.9769)

We expect a range today of 1.5250 – 1.5330

Majors:
In what should be viewed as good news, the US economy grew at an annual rate of 1.7 percent from April through to June, exceeding the initial forecast which had estimated only a rise of 1.5 percent. With Markets now constantly waiting on the next piece of news out of both the US Federal Reserve and the ECB the Fed Reserve’s Beige Book released overnight showed the US economy is expanding gradually with notable improvements in home and retail sales. Putting into perspective that QE3 is not guaranteed markets are likely to remain subdued and range bound ahead of Bernanke’s speech in two days time. Meanwhile throughout Europe overnight the shared unit dropped from an earlier high of 1.2572 against the Greenback to where we are this morning at 1.2528 after Angela Merkel and Italian PM Mario Monti publicly clashed over Europe’s debt crisis fix. Highlighting the difficulties involved in solving Europe’s debt crisis Germany’s Merkel remains under pressure to ensure Europe’s leaders don’t overstep their mandate when seeking bailout funds for weaker nations.

Data releases

AUD:
Building Approvals m/m, Private Capital Expenditure q/q

NZD: NBNZ Business Confidence

JPY:
Retail Sales y/y

GBP: Net Lending to individual’s m/m

EUR:
Italian 10-y bond auction

USD:
Unemployment Claims, Personal Spending m/m