Most currency pairs consolidated within new trading ranges and many of them fell against the U.S. dollar as the global slowdown intensifies. Commodities prices bounced as the credit crisis renewed investors’ risk aversion.

The RBA’s August minutes confirm a probable rate cut of 25bps to 50bps at their next meeting on 2 September. The Westpac-MI June leading index fell to 2.0% annualised, the sharpest fall since 2000 and well below long-term trend growth of 3.9%. Motor vehicle sales fell −3.4% in July, partly as a result of the increase in the luxury car tax which saw SUV sales fall −11.9%. AUD/USD traded flat for the week within a narrow 200 pip range between 0.8800 and 0.8600.

The U.S. leading economic indicator and housing starts measurements were both negatively affected in July by a technical blip in housing permit issuance in New York City. The LEI fell by −0.7% m/m and housing starts printed 956k, the lowest level in 17 years, although the NAHB housing market index remained steady at 16. Producer prices jumped 1.2% for July and the Philadelphia Fed index rose to −12.7% in August.

Eurozone August PMI readings remain steady, with manufacturing at 47.5 and services at 48.2, both below the break-even 50 level but not substantially so. The current sentiment component of the ZEW survey for Germany printed at −55.5 while the Eurozone composite came in at −22.2, and June industrial new orders fell −0.3% m/m while May’s figure was revised down to −5.4%. EUR/USD edged 0.7% higher for the week in a consolidation between 1.4650 and 1.4900.

The second estimate of U.K. 2Q2008 GDP was revised down to 0.0% with 1Q2008 measuring 0.2%, confirming the image of a stagnating economy. July retail sales rose 0.8% m/m after falling −4.3% in June, and the Rightmove house price index fell 2.3% m/m in August. EUR/GBP climbed into the top of its established trading range between 0.7800 and 0.8000, closing the week at 0.7980, while GBP/USD bounced between 1.8500 and 1.8800.

Canada’s June wholesale sales rose 2.0%, roughly triple market expectations, while retail sales rose 0.5%. CPI remains tame with a 0.3% rise for June and the core rate holding at 1.5%. USD/CAD fell opposite the bounce in crude oil, closing the week at 1.0482, which is the 38.2% Fibonacci retracement level between parity on 22 July and the high of 1.0726 set 12 August, best seen on daily charts. AUD/CAD consolidated for the first half of the forex trading week before falling hard and closing the week at 0.9082.

New Zealand input PPI rose by 5.6% q/q in 2Q2008 and output PPI rose 3.6%. NZD/USD consolidated within an upward-trending regression channel, entered 13 August and best seen on four-hour charts, closing at the lower edge of the channel at 0.7089.

The Bank of Japan kept interest rates steady at 0.5%, as expected, for the 21st consecutive month. Exports rose 8.1% m/m and imports 18.2% as Japan’s trade surplus shrank by 86.6% y/y and China surpassed the U.S. as the nation’s leading export market. JPY maintained the consolidation theme for the week, with USD/JPY remaining between 110.65 and spiking through but respecting support at 108.35, while the range for AUD/JPY was 94.00 and 96.50.