:: Australian Dollar: Political uncertainty has pushed the Australian Dollar to open this morning at 0.8860 against the US Dollar, sliding as much as 0.8%. The Australian Federal election, for the first time in 70 years, has failed to deliver a majority government. Currently the Australian Labour Party has 70 seats out of 150 while opposition Leader Abbott's Liberal-National coalition has 72, forcing both Leaders to open negotiations with independent lawmakers to form a minority government. The prospect of a less stable government and the possible drift to less friendly business policies will certainly weigh down investor opinion as the two major parties undergo talks.

- We expect a range today in the AUD/USD rate of 0.8825 to 0.8900 

:: Great Britain Pound: Following Thursday's surprisingly strong UK retail sales figures the British Pound continued to drift lower as investors sold off risk. The Sterling fell more than 1 cent to 1.5463 US offshore after reaching 1.5596 US early in Asia. Political strife may be stirring once again in the UK with Conservative ministers brushing off reports of emerging rifts within the coalition as spending cuts loom. The Cable regained a foot hold following some disappointing US economic data trading sideways around 1.5530 US. This morning the Pound opens at 1.5537 US Dollars. Meanwhile, the hung parliament in Australia has seen the Sterling open stronger against the Aussie at 1.7511 and buying 2.2020 Kiwi.

- We expect a range today in the GBP/AUD rate of 1.7480 to 1.7535 

:: New Zealand Dollar: The Kiwi remained capped at 0.7080 US Dollars during Asia. Despite PPI input for the previous quarter pleasantly surprising investors on Thursday the Kiwi was weighed down by political uncertainty of its Tasman neighbour. After a knife-edge election on Saturday it''s unclear who will govern Australia, as the major parties remain in a deadlock for power. Investors selling out of Australia also left the Kiwi behind. The Kiwi slid more than 2% to 0.7000 versus the Greenback overnight. This morning the Kiwi opened at 0.7047 against the Big Dollar

- We expect a range today in the NZD/USD rate of 0.7020 to 0.7070 

:: Majors: The Euro dropped for the second week in a row against the Greenback as weaker economic reports from Japan and the US continued to heighten risk aversion, dampening investor appetite. Offshore the Euro opened buying 1.2831 US before falling more than 2% to 1.2664, its lowest level since July 15th. Meanwhile European stocks posted their largest decline in 7 weeks. Japanese bonds gained for a second week as evidence global growth is slowing builds. The US Dollar weakened to 85.18 Yen early in Asia while the Bank of Japan continues to assess the economic impact of the Yen's rise to 15 year highs. The USD climbed to 85.80 Yen offshore in the lead up to the Philly Fed's manufacturing index which was widely expected to increase from 5.1 to 7

.1. The resulting decline of -7.7 showing an outright contraction in US demand reduced the US to 85.60 Yen.

:: Data Releases:

  • AUD: No Data Today
  • CAD: No Data Today
  • EUR: German PMI, August
  • GBP: No Data Today
  • JPY: No Data Today
  • NZD: No Data Today
  • USD: Chicago Fed National Activity Index, July

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