All praise be to Allah, peace and blessings be upon Prophet Mohammad and upon his family and righteous companions.
It is permissible for a woman to lead women in prayer provided that non-Mahrams ( Marriageable men ) aren`t present. This is according to what Al-Baihaqi and other scholars of Hadith reported after A`isha (May Allah be pleased with her): “ She used to perform Azaan (call for prayer), Iqamah and lead women in prayer while in the middle of the front row.” {As-Son`nan Al-Kobrah}. Abu Dawood also narrated that the prophet (PBUH) used to visit Um Waraqah Bint Abdullah Bin Al-Harith at her home, appointed a Mo`azin for her and ordered her to lead the female members of her family in prayer. Abdulrahmaan said: “I saw her Mo`azin. He was an old man.” {Son`nan Abu-Dawood}.
It is recommended that she stands in the middle of the front row while being advanced a bit in front of them. The eminent scholar, Ba`ash`in (May Allah have mercy on his soul) said: “It is recommend that she stands in the middle of the first row while leading them in prayer since it maintains the modesty of the congregation, and because this act was confirmed in the narrations after A`isha and Um Salamah.” And Allah knows best.