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Westpac Institutional Bank - www.westpac.co.nz
FX Blog - Morning Report
Report Monday 25 August 2008
A nearly $7
slide in NYMEX crude oil prices and a not entirely coincidental equity rally
(DJIA +198pts) helped USD Index rise 0.8% from London into the NY close. The
dollar was also boosted by a news report that Korea Development Bank was
considering investment in Lehman Bros (some reports suggested buying the whole
company). The S&P 500 Financials Index rose 3.1%. The dollar softened
slightly on Fed chairman Bernankeâ€™s wary tone on the continuing â€śfinancial
stormâ€ť. The New Zealand
dollar steadily lost ground vs USD, from 0.7180 in the London morning to
close the week at 0.7088.
about a cent at the same time, finishing at 0.8665, not far off its lows. The
0.8650 area found buyers as it did on Thursday.
down from 1.4869-80 to a 1.4758 low, finishing at 1.4793.
up from 109.00 to flicker above 110.00 in late NY.
Fed chief Bernanke kicks off Jackson Hole
symposium. In his address â€śReducing Systemic Riskâ€ť he described the past
year as â€śone of the most challenging economic and policy environments in memoryâ€ť.
minutes outline new communication vehicles. The Bank will release
statements even when there has been no change in policy; the semi-annual
outlook forecast horizon will be extended by a further year; and they will be
updated quarterly with information on
the distribution of views. Otherwise, the minutes were low key, other than the
interim assessment of the Outlook projection. The board judged that activity
was weaker than projected and prices had been stronger than projected.
industrial orders down 0.3% in June. Not a big fall, but still the fourth decline
in five months, and enough to pull the annual pace of decline down to â€“7.4% yr.
In other news, the current account remained deeply in deficit in June, at â‚¬8.2bn.
At this rate, Europe could
record a full-year deficit, although lower energy import prices in H2 2008
might yet prevent that.
growth revised down from 0.2% to nothing in Q2. Private consumption
fell 0.1%, investment was down 5.3% and both exports and imports fell. GDP
growth would have been negative were it not for inventory accumulation.
should be range-bound to a little firmer near term, after recent NZ
short of the gloomiest scenarios. We are neutral on NZD TWI but NZD/USD should
find buyers on dips.
Country Release Last Forecast
25 Aug NZ
Jul Food Prices 1.3% â€“
Existing Home Sales â€“2.6% 3.0%
26 Aug NZ
Jul Merchandise Trade NZDm â€“223 â€“600
Inflation Expect â€“ 2yr Ahead 2.9 3.1
US Jun House
Prices %yr â€“15.8% â€“16.8%
Aug Richmond Fed Survey â€“16
Jul New Home
Sales 0.6% â€“2.5%
Consumer Confidence 51.9 53.5
Prices â€“0.3% â€“0.4%
â€˘ NZ Weekly
Forex Outlook (18 August)
â€˘ NZ Q2
Retail Sales Review (15 August)
â€˘ NZ Weekly
Forex Outlook (11 August)
â€˘ NZ Q2 HLFS
Review (7 August)
â€˘ NZ Q2 Wage
Review (4 August)
â€˘ NZ Weekly
Forex Outlook (4 August)
â€˘ The coming
employment downturn (30 July)
papers/publications are available on Online Research on Westpac
Bankâ€™s website (www.wib.westpac.co.nz)
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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