Monday May 23, 2005 - 21:29:23 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning Report
Tuesday 24 May 2005
Westpac Institutional Bank Morning Report
New Zealand Dollar: NZD posts modest gains on the day
NZD/USD recovered from opening lows during a quiet local session on Monday, drawing support from further comments from Finance Minister Michael Cullen, that although the US dollar "remains weak" and "sentiment towards the NZD can change quickly", a "sharp NZD adjustment is currently unlikely". The market paid scant attention to the release of Q1 PPI data, with output price increases of 3.2% y/y already showing up the earlier released CPI data. In the offshore session, a further test to 0.7063 lows proved short-lived and the currency again recovered to 0.7100 from where the market opens this morning.
Australian Dollar: AUD looks to regain .7600
Following sharp losses in the offshore session on Friday, the AUD made a modest recovery during a quiet local session on Monday. With a light data calendar this week, AUD/USD posted a narrow range on the day of 0.7546 to 0.7571. Light trading also dominated the offshore session, with an early dip lower to 0.7552 lacking conviction. In the absence of other drivers, modest gains in base metals offered some support to the AUD, which opens this morning seeking to again establish itself above 0.7600.
Major Currencies: Euro holding for now
managed a small gain against the dollar overnight in a relatively quiet market. Support was found at 1.2540 and that was the platform for the euro to head to a 1.2598 high. Many believe that this euro strength will be short-lived, as negative sentiment in Europe will see it decline further in the short-term. GBP
shrugged off weak housing data to reach a high of 1.8312 overnight, but remains largely unchanged as we open this morning. JPY
traded in a tight range as more comments out of China kept most participants on the sidelines.
No major US data.
UK house prices down 0.1% in May.
Hometrack also reported prices down 2.3% over the past year, but noted that the number of transactions was rising again, suggesting that the market might be stabilising.
Country Release Last Forecast
US Apr Existing Home Sales 1.0% 1.4%
May 3 FOMC Meeting Minutes
May Richmond Fed Survey 2 n/f
Jpn Mar Tertiary Activity Index -1.0% 0.1%
Eur Mar Trade Balance EURbn nsa 3.0 n/f
Mar Industrial Orders -2.6% 2.0%
Ger May ZEW Economic Sentiment 20.1 25.0
Q1 GDP Revision 1.0% a 1.0%
May Cost of Living Prelim %yr 1.6% 1.5%
UK Q1 Business Investment 0.2% n/f
Can Apr Leading Index 0.2% 0.3%
Latest Research papers/Publication
LaLatesttest research Papers/Publications
Wages - a precursor of inflation? (23 May)
NZ Weekly Forex Outlook (23 May)
NZ Weekly Interest Rate Wrap-up (23 May)
NZ Budget 2005 Review (19 May)
Taking Stock (17 May)
NZ Weekly Forex Outlook (16 May)
NZ Weekly Interest Rate Wrap-up (16 May)
NZ Budget 2005 Preview (13 May)
NZ Q1 Retail Sales Review (13 May)
NZ Q1 HLFS Review (12 May)
These papers/publications are available on Online Research on
Westpac Institutional Banks website (www.wib.westpac.co.nz)
Westpac Banking Corporation ABN 33 007 457 141 incorporated in Australia (NZ division). Information current as at 24 May 2005. 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. © 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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