Amid week's main gainers Aussie and Kiwi can be mentioned, which both added more than 2% against the U.S. Dollar. Despite a lack of fundamental news from New Zealand, the currency inched higher, while the Australian currency was supported by a series of upbeat data, including stronger-than expected building approvals, increase in retail sales, a jump in GDP and dovish comments from the Reserve Bank of Australia. The Australian central bank kept its benchmark cash rate at its all-time low of 2.50%, after claiming it could trim the rate if necessary a month ago. The RBA has cut its cash rate seven times since late 2011, while the most recent adjustment was made on August 6, when it cut it by 25 basis points. It seems that recent cuts are working through the economy, as home prices ticked up 5.3% during the year to August 31, while Sydney property prices registered the biggest quarterly gain since April 2009. Another challenge is on the rise for Canberra amid growing tensions in Syria. Current Prime Minister Kevin Rudd tried to exploit it to highlight opponent's inexperience in world affairs. And even though Tony Abbott from the center-right Liberal Party is expected to win the election on September 7, the most critical choice for the country is not between two candidates, it is about choosing between China and the U.S.
Policymakers in Canada, Japan, Europe and the U.K. stayed pat on their policies, refraining from any additional stimulus measures. Nevertheless, the greenback held firm near a seven-week high against a basket of major currencies on Friday after solid fundamental data from the world's largest economy. EUR/USD lost 0.8% touching the lowest since July 19. In the interview with Dukascopy, Adam Cole, Global Head of FX Strategy at RBC Capital Markets said: "Overall, I assume that investors probably are surprised how robust performance of the Euro is. We expect it [Eurozone economy] to pick out at the current levels with a moderately negative outlook going forward. Nevertheless, so far the surprise is being that the Euro sells up so well."
This week, on Wednesday New Zealand central bank will hold its monthly policy meeting, while on Friday U.S. producer prices and retail sales data will be out. Additionally, on Thursday ECB monthly bulletin is scheduled, where Mario Draghi can give some bold comments, adding some turbulence into markets.