The euro recorded its largest weekly gains in six months even as investors once again grew cautious over plans by European policy makers to contain the European debt crisis. Investors gained hope after German Angela Merkel said that she wanted Greece to stay in the eurozone even as concerns were raised by the Bundesbank over the ECB bond buying programme. Merkel said that Germany is ready to help Greece take the necessary steps to resolve the nation's debt crisis. The euro lost ground on Friday as the bond buying programme was held up by a pending German court ruling. Germany's Constitutional Court is due to rule on the legality of the permanent bailout fund for Europe on September 12. The euro gained almost 1.5% over last week and opens this week steady at 1.2510. Investors are now waiting for Federal Reserve Chairman Ben Bernanke's speech at Jackson Hole this Friday to indicate whether the Fed might be taking further steps to ease and the timing of any such action. It is our view that Bernanke will once again fall short of the market's expectations and will instead wait until the Federal Reserve's September 12 meeting before he will give any indications of his thoughts. Even then, it is highly unlikely that he will announce further easing measures. The upcoming week has a busy U.S. economic calendar with the release of the Beige Book, second quarter GDP revisions and consumer confidence data. The Australian dollar opens the week at 1.0410. U.S. equity markets managed to gain on the last session of the week but still managed to lose ground for the first week-ly loss, after a six week rally, on renewed Europe concerns. Mounting doubts over the effectiveness of various plans to tame the debt crisis and falling expectations of central bank intervention to provide further stimulus to the markets weighed on investors. Apple shares have gained to set another record for market capitalisation. Over the weekend Apple was awarded over $1 billion in its intellectual property case against Samsung Electronics. Stocks were weighed down in a week which started with the German Bundesbank renewing its criticism of the European Central Bank bond buying programme. The S&P 500 closed Friday 0.65% higher at 1,411 while European bourses were modestly higher. The DAX gained 0.31% while the CAC rose 0.02% Commodity prices eased on the final session of a week, which had seen strong rises, as the CRB index lost 1.20 points to 306.04. WTI crude finished the week above $96.00 as Tropical Storm Isaac gained strength and threatened to disrupt production in the Gulf of Mexico. Precious metals recorded a strong week to consolidate gains as gold was steady at $1,673 while silver rose 0.55% to $30.70. Soft commodities were mixed with cotton falling more than 2% while copper eased 0.25%.

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