Monday December 21, 2009 - 19:37:07 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex Research - Morning Report
Morning Report Tuesday 22 December 2009
News and views
In a quiet pre-Xmas session the USD traded on the strong side of recent ranges aided by higher US bond yields. The US 10 year yield rose 10bp to 3.64% its highest levels in over four months following comments from Chicago Fed President Evans' that an extended period of accommodation "is at least three to four meetings".
EUR traded a rough 1.4280-1.4380 range overnight and opens local trading on the weak side. ECB speakers did little to install confidence in EUR with Stark saying we, "must expect further bank writedowns", while Orphanides noted that Greece is in a "dramatic situation" and that the Euro-region banking system "remains fragile.
AUD is down about US1 cent from its Monday opening levels in Asia even as risk appetite remains firm with the Dow rising 110pts overnight. Gold shed $21/oz.
NZD/USD opens the local session at 0.7065, just above very important technical support at 0.7030.
US Chicago fed national activity index jumped from -1.02 to -0.32 in Nov. This index is based on 80 or so previously released statistics from the month and So illustrates the apparent improvement in eco conditions that took place then.
Canadian retail sales up 0.8% in Oct led by strength in autos and clothing. Sales have risen eight out of ten months this year So far.
AUD/USD and NZD/USD outlook today: The strong USD theme continued for yet another session yesterday and this leaves both AUD and NZD looking vulnerable even as equity markets trade well. The AUD looks set to probe deeper into the 0.86-0.88 region. A break beneath 0.7030 would add to downside risks for the NZD.
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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