Tuesday July 5, 2005 - 22:31:15 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning ReportNew Zealand Dollar: NZD continues downward drift
NZD/USD again opened around its daily highs yesterday morning and continued to drift lower as the local session wore on. Sentiment remained bearish following the currency's fall through several key support levels. A lack of local data on the day also ensured that NZD direction was driven by USD movement. The NZD was again marked lower against its major crosses, posting a six month low against the AUD and a one month low against the euro. Meanwhile an OECD review on the NZ economy issued yesterday said the economy's mid-term prospects were bright but improved productivity and competition were needed in several sectors. The overnight trading session saw the return of US markets from holiday and the NZD pushed a little lower to post an intraday low of 0.6736. The currency opens around 0.6760 this morning.
Australian Dollar: AUD tests 0.7400
The AUD initially traded a tight range during Tuesday's local session contained between 0.7500 and 0.7480 just above well advertised stops at 0.7475. Local data on the day consisted of June's AIG services survey. This posted an increase for the month and the survey indicates that growth remains concentrated primarily among sectors exposed to business demand. Early trading in the London session saw AUD trigger stops through 0.7475 and pushed the currency to 0.7440. Further selling saw the AUD reach an intraday low of 0.7392 before it recovered slightly to open around 0.7420 this morning.
Major Currencies: USD slips on profit taking
The USD slipped from Tuesday's 14-month high against the euro
as investors turned more cautious ahead of the US jobs report due on Friday. With increased volumes due to the return of US traders after a long holiday weekend, the euro recovered some lost ground on USD profit taking ahead of Fridays report. The euro was lifted off its lows to a 1.1940 high in offshore trading and opens this morning at around 1.1920. Meanwhile the USD/JPY
rose to 11-month highs of 112.13 in early offshore trading as current oil prices continued to weigh on the yen. However the USD/JPY was beaten down on profit taking and opens this morning at around 111.60.
US factory orders rise 2.9% in May.
Not much new information here. Durable orders were unrevised from their previously reported Boeing driven spike; non-durable orders were little changed for the second month running, due mainly to the sharp energy price gains of March being unwound somewhat. Reflecting the time it takes to build aircraft, and the lack of orders strength in other sectors, shipments were flat. Manufacturing inventories were also flat, for the second month running.
Euroland retail sales jump 1.1% in May.
Retail sales bounced back from their April fall in May, stronger than expected, but not enough to suggest any sort of sustained upswing in consumer spending.
UK retailing looking up?
In contrast to the Confederation of British Industry's weakest ever retail survey since records began 22 years ago, the British Retail Consortium June survey showed some improvement, attributed in part to price discounting and warmer weather encouraging purchases of summer lines. The day before the July Bank of England meeting begins, this result should call into question some of the more pessimistic assessments of the state of the UK consumer.
Country Release Last Forecast
6 Jul Aust RBA Policy Announcement 5.50% 5.50%
US Jun ISM Non-Manufacturing 58.5 60.5
May Pending Home Sales 3.6% -1.5%
Eur Jun Retail PMI 50.2 n/f
Ger May Factory Orders -2.6% -1.0%
UK May Industrial Production 0.9% flat
Jun BRC Shop Price Index
7 Jul Aust Jun Employment chg 14.0k flat
Jun Unemployment Rate 5.1% 5.2%
Latest Research papers/Publication
NZ Q2 Employment Confidence Index (6 July)
NZ Economic Overview July 2005 (4 July)
NZ Weekly Forex Outlook (4 July)
NZ Weekly Interest Rate Wrap-up (4 July)
A capital idea (1 July)
NZ Weekly Interest Rate Wrap-up (28 June)
NZ Weekly Forex Outlook (27 June)
NZ Q1 GDP Review (24 June)
NZ Q1 Current Account Review (23 June)
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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