Major currencies consolidated in narrow ranges ahead of top tier US economic data and the highly anticipated Bernanke speech at Jackson Hole.

Rhetoric in Japan continued overnight adding pressure to the yen. Prime minister Naoto Kan stated that Japanese officials are willing to take 'bold' action to stem the currency’s advance as it 'movements in the currency market have a negative impact on economic and financial stability'. Finance minister Yoshihiko Noda said the currency situation is 'severe' and reiterated that the government is prepared to take appropriate action when necessary. The comments come as no surprise and seem to be more of a reminder to the market of the willingness of Japanese officials to take action. US4/Yen gained to around 84.85 on a softer yen and the Nikkei 225 advanced by 0.95 per cent.
 
The economic data out of the US has been increasingly disappointing of late and the revisions to second quarter GDP are likely to continue this theme. The consensus estimate for GDP is at 1.4 per cent annualized versus the initial 2.4 per cent. The spotlight today will be on Federal Reserve chairman Ben Bernanke’s speech at Jackson Hole. We would expect him to acknowledge the weakening economy as is evident from the recent stream of negative economic data. He is likely to point out that however that the data still points to growth, just slower than previously anticipated. The markets are questioning what he can say to assuage investors in the face of deteriorating outlook.