True to recent form, markets remained transfixed on the forthcoming Jackson Hole conference on Friday but there remained little in the way of convincing moves across the risk spectrum. The Aussie dollar continue to be capped below 104 US cents with moderate weakness noted in throughout the U.S session but remained supported above key short-term support at 103.4 US cents. The Euro followed a similar path unable to break through the upside of 1.2580 before weakening over the course of U.S trade. After mild weakness on Tuesday, the U.S dollar was well bid across major counterparts with the Kiwi, Euro and Swiss franc leading a move lower.

In economic news, preliminary estimates for German consumer prices in August showed inflation rose 2-percent in annual terms from 1.7 percent in July. Expectations were for slightly more moderate rise to 1.9 percent. In an article in the German publication Die Zeit, European Central Bank President Mario Draghi once again signalled non-standard policy initiatives are on the horizon, writing "It should be understood that fulfilling our mandate sometimes requires us to go beyond standard monetary policy tools." Draghi also wrote "when markets are fragmented or influenced by irrational fears, our monetary policy signals do not reach citizens evenly across the euro area, "the ECB will do what is necessary to ensure price stability, it will remain independent and it will always act within the limits of its mandate." Citing increased workload, Draghi has cancelled his scheduled appearance at the Jackson Hole conference later this week.

Across the Atlantic, U.S second-quarter GDP was revised higher from 1.5 to 1.7 percent as expected. Core consumption expenditure also matched preliminary estimates recording quarterly growth of 1.8 percent. Personal consumption increased to 1.7 percent ahead of preliminary expectations of 1.5 percent. The release of the Fed's beige book which is an anecdotal account of current conditions from each of the 12 Federal Reserve districts showed growth remained moderate. According to the text, economic activity continued to expand "gradually" across most regions. On balance it appears even though there may be bright spots throughout some districts, it hardly represents a material change to overall subdued conditions with some regions experiencing "slow growth in most sectors and declines in manufacturing."

Once again the local session will see little in the way of major themes to prompt any significant moves. Data on private capital expenditure is scheduled to be released at 11.30. We anticipate regional equities to direct short-term price action before we're once again at the mercy of European and U.S markets to guide the way. At the time of writing the Australian dollar is buying 103.5 US cents.

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