USD - The dollar begins the last day of the week stronger against nearly all of its major counterparts as stocks and commodities swing between gains and losses. Trading volumes remain thin with many market participants still on summer vacation, which has led to choppy, listless ranges for the dollar. Investors are also largely sidelined ahead of the Fed's annual summit in Jackson Hole, WY scheduled for later this month. After minutes from the FOMC's last meeting suggested that further monetary easing may soon be warranted, the market will be paying particularly close attention to Chairman Bernanke's speech. However, with stocks struggling to maintain gains through the week, it's clear that there's a bit of doubt surrounding QE3. Consequently, the dollar has found support, albeit towards the lower end of its recent ranges, as investors remain concerned with the outlook for global economic growth. However, contradictory to evidence of decline elsewhere, US durable goods orders gained 4.2% in July after a substantially smaller 1.6% gain posted in the previous reading. Orders for non-defense capital goods, such as computers and machinery did slump 3.4%.

EUR - The EUR is back towards the lower end of its recent narrow ranges against the USD as little progress has been made over backstopping the region's troubled economies. In Germany, lawmakers have said they will await a report from the so-called "troika" (EU/ECB/IMF) regarding Greece's progress towards reaching fiscal benchmarks before considering an easing of conditions. Greek PM Samaras is lobbying for a two-year extension of his nation's "bailout" programs, but core Eurozone policymakers clearly equate that with an increase in lending - not a popular notion amongst German voters. However, it appears that Samaras has French President Hollande's ear, who may prove to be a strong ally when Hollande and German Chancellor Merkel meet this weekend. Meanwhile, investors are now expecting that the ECB will await a final German court decision over the legality of Europe's permanent "bailout" facility, the ESM, before unveiling further details of the Bank's proposed sovereign bond buying program. Debt yields in Spain and Italy are thus on the rise this morning as it becomes clear that a number of legal and political decisions need to fall into place before the ECB buys any government debt. There are also rumors this morning that German Finance Minister Schauble has suggested that it may be possible for Greek to exit the Eurozone temporarily, with a reinstatement of the common currency once certain conditions are met.

GBP - Sterling is lower this morning on dovish commentary from the BoE. Bank policymaker Martin Weale told reporters that he would favor a cut in interest rates over further quantitative easing. He did go on to say that he doesn't see a need for further stimulus right now, but that the BoE members will continue to review the need on a monthly basis. With the Bank's next meeting scheduled for September 6th, investors will be closely watching officials' commentary in the lead up.

JPY - The yen slipped lower after BoJ Governor Shirakawa told reporters that he is well aware of the ill effects a strong yen is having on the Japanese economy. He also stated that the Bank will continue with power policy easing measures until the CPI goal of 1% is reached. While his comments likely won't translate into market intervention in the near term, the BoJ could again step in to sell yen should it strengthen below the key 76 level.

Commodity Currencies - The commodity linked currencies are mixed this morning with both the CAD and MXN strengthening while the AUD and NZD pare recent gains. Raw goods are mixed with oil rising to $97/bbl, gold dropping to $1667/oz, and copper remaining flat $349/lb. The CAD reversed early losses after the strong US durable goods report provided support. Similarly, the MXN is stronger this morning as signs of economic health in the US will likely provide continued demand for Mexican exports. The AUD and NZD are both lower as further weak data out of China - the main destination for the South Pacific nations' exports - curbs demand. The AUD has however found support after RBA governor Stevens announced that the Swiss National Bank has been adding AUD to its reserves.