Tuesday July 22, 2008 - 21:10:38 GMT
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Westpac Institutional Bank - www.westpac.co.nz
FX Research - Morning Report Morning Report
Wednesday 23 July 2008News and views
The London morning saw the USD slightly offered as Europe digested the oft Amex earnings report, then followed a record $8.9bn loss at Wachovia. ater on though, hawkish comments from Paulson and Plosser and then ilâ€™s fall to a low since 5 June (ahead of a vote in Congress on the Excessive nergy Speculation Act of 2008) saw the USD better bid. The New Zealand ollar popped its head over 0.7630 but then slid well below 0.7600 amid road USD recovery.
The Australian dollar rose as far as 0.9792 in London but tumbled to just elow 0.9700 in NY as the greenback bounced.
USD/JPY was lively again, both down on the softer USD early (106.05 low) hen back up to 107.40 or so in late NY as US equities gained momentum â€“ een Wachovia shares rebounded very strongly.
EUR/USD only saw modest upside in London, to a high of 1.5945 then was umped to 1.5770 as NYMEX oil fell $5/bbl in short order, to around $126, efore oil buyers returned.
US Richmond Fed index drops from â€“12 to â€“16 in July. The regional actory index was dragged to its lowest since the Iraq War and before that he 2001 recession by sharply weaker shipments and softer orders although he jobs measure was less negative in July. The associated retail and services ector surveys were also weak, the former dropping from â€“33 to â€“43 and the atter edging down from â€“14 to â€“15.
US house prices down 4.8% yr in May. This is the narrow Office of ederal Housing Enterprise Oversight price index, which has been falling ince May 2007, but at a less steep pace than some of the other US house rice measures.
Fedspeak. Hawkish Plosser was on the wires arguing that monetary policy eeds to be retightened â€śsooner rather than laterâ€ť, even before there are igns of economic turnaround. He said the Fed should pay more attention o headline inflation than core rates.
Japanese all-industry activity index rose 0.4% in May. This series ncorporates known inputs on IP (+2.9%) and tertiary activity (-0.2%). The ew information comes from the public sector (-0.1%) and construction -1.7%). On the latter, the recovery in building activity following the policyinduced ir pocket of last year looks to have stalled.
Canadian retail sales up 0.4% in May. Higher gasoline prices supported the report; clothing sales fell 0.7% and food sales were flat.Outlook
We continue to like NZD/USD lower multi week especially on a TWI basis. However, the pair is likely to range trade now ahead of tomorrowâ€™s all
Westpac Strategy, 0800 922 239
With contributions from Westpac Economics
Date Country Release Last Forecast
23 Jul Aus Q2 Headline CPI %qtr 1.3% 1.2%
Q2 Avg RBA Underlying CPI %qtr 1.2% 1.2%
US Fed Beige Book
Fedspeak: Mishkin and Kohn
Eur May Industrial Orders 2.5% â€“1.5%
UK Jul BoE Minutes 8:1 7:2
Jun Mortgage Lending ÂŁbn 28.0 â€“
Jul CBI Industrial Trends Survey
Can Jun CPI %yr 2.2% 2.8%
Jun CPI Boc Core %yr 1.5% 1.6%
24 Jul NZ RBNZ OCR Review 8.25% 8.25%
Latest Research Papers/Publications
â€˘ NZ Weekly Forex Outlook (14 July)
â€˘ RBNZ OCR Preview (18 July)
â€˘ NZ Q2 CPI Review (15 July)
â€˘ NZ Economic Overview July 2008 (14 July)
â€˘ NZ Weekly Forex Outlook (14 July)
â€˘ NZ Q2 CPI Preview (10 July)
Westpac Banking Corporation ABN 33 007 457 141 incorporated in Australia (NZ division). Information current as at 14 November 2007. All customers please note that this information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs. Australian customers can obtain Westpac's financial services guide by calling +612 9284 8372, visiting www.westpac.com.au or visiting any Westpac Branch. The information may contain material provided directly by third parties, and while such material is published with permission, Westpac accepts no responsibility for the accuracy or completeness of any such material. Except where contrary to law, Westpac intends by this notice to exclude liability for the information. The information is subject to change without notice and Westpac is under no obligation to update the information or correct any inaccuracy which may become apparent at a later date. Westpac Banking Corporation is regulated for the conduct of investment business in the United Kingdom by the Financial Services Authority. Â© 2004 Westpac Banking Corporation. Past performance is not a reliable indicator of future performance. The forecasts given in this document are predictive in character. Whilst every effort has been taken to ensure that the assumptions on which the forecasts are based are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The ultimate outcomes may differ substantially from these forecasts.
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