Australia: The Australian Dollar has opened up firmly above 0.9000 this morning after the release of two major announcements on the weekend: US GDP Q2 figures and China PMI (purchasing manger's index) for the month of July.
The financial markets were somewhat disappointed by the US growth figure of 2.4% as a figure of 2.6% was expected.
This saw equity markets on Friday finish unchanged while European indices had fallen modestly with the FTSE down by the largest margin of 1.1%. In the US GDP results, there was a strong increase in investment by companies in capital expenditure and IT spending, which is a positive move.
There is still concern that additional government stimulation is needed to keep the US economy growing and reduce the unemployment rate which is still remains around the 9.5% level.
Some analysts believe further quantitative easing is possible since there is no scope to do anything on the interest rate side with rates still in the band of nil to 0.25%.
The Chinese PMI figure fell to 51.2 in July from 52.1 in June, which is the third month in a row it has declined. This is still the 17th straight month the figure has been above the level of 50, which indicates expansion.
With a firmer tone being set in the equity markets in the US in the last several weeks due to better than expected Q2 earnings, relatively positive news from the US and China over the weekend this should add to a firmer tone in the AUD in the near term.
Although trading may be subdued today due to the bank holiday in NSW, tomorrow retail sales figures are released along with the result of the RBA meeting where all of the market expects no change in interest rate policy.
Later in the week international trade data (Wednesday) and the RBA's quarterly monetary policy (Friday) will be announced.
Majors: The USD continues to maintain its weakish tone with it falling to an 8 month low against the JPY of below 86.
The GBP also appreciated against the USD to a 5-month high above 1.5730. USDEUR remains firmly above 1.3000.
The tone of the USD remains weak as reflected in higher base metals which were all up along with a small increase in gold to US$1181 an ounce and crude oil to just under US$79 a barrel.
Soft commodity prices were also stronger across the board although this was due more to drought issues in Europe rather than the slightly disappointing US Q2 GDP number.