Monday July 25, 2005 - 23:49:50 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning ReportNew Zealand Dollar: NZD at 0.6850 as election date announced r
Having failed to break higher through 0.6890 during the offshore session on Friday, the NZD opened on a softer note on Monday. Despite this however, little follow through selling emerged. With attention focusing towards Thursday's RBNZ meeting and the announcement of September 17 national elections, the currency remained confined to a narrow 0.6827 - 0.6848 range during local trading. Although USD buying overnight saw the NZD test lower to 0.6811, the market again lacked the impetus to break from current ranges. The currency subsequently rebounded and it opens this morning at the familiar level of 0.6850.
Australian Dollar: AUD remains in familiar range
The AUD had also backed away from recent highs by the open yesterday. Although the market continues to find underlying support from rising commodity prices, the currency immediately lost ground following the release of softer than anticipated inflation data. However, while a 0.8% increase for Q2 PPI was considered lacklustre given a large increase in petroleum products, the AUD steadily recovered from early 0.7605 lows. The currency dipped lower to 0.7585 during the offshore session, but with the USD unable to break the psychological 112.00 and 1.2000 levels against the yen and euro, the AUD rapidly recovered back to 0.7635, from where it opens this morning.
Major Currencies: Largely directionless Monday as investors debate yuan outlook
Most major currencies were range bound on Monday as a dearth of major economic data provided currencies with little direction. The USD continued to ratchet higher against the yen on Monday as the impact of last weeks revaluation of the Chinese yuan faded and investors turned their focus back to US economic data and interest rate differentials. The JPY
opens this morning around 111.40, off its overnight highs of 111.93. The euro
was range bound in domestic and offshore trading in the absence of major data, trading 28bps and 58bps ranges respectively and opens this morning mid range at 1.2065. The GBP
gained 4% against the USD to 1.7474 as investors bought the GBP back to cover short positions in what has been a bearish 2-week period.
US June existing home sales strong.
The number unexpectedly rose to a new record high climbing 2.7% to an annualised pace of 7.33mn, following an upwardly revised 7.14mn in May. The market median forecast was for 7.15mn.
German preliminary inflation up.
Bavaria joined the list of German states publishing July inflation outcomes, registering a lift to 2.3% y/y from 2.2%. The pattern matches that of three other states' figures released in preceding days, all registering upward creep and in Saxony's case a jump to 2.3% from 2.0%. Higher oil prices triggered month-on-month acceleration in inflation. The state results to date suggest the national inflation rate will move up to at least 1.9% from 1.8% in June.
Country Release Last Forecast
26 Jul Aust Q2 NAB Business Survey
US Jul CB Consumer Confidence 105.8 107.5
Jpn Jun Corp Services Prices %yr -0.5% n/f
Ger Jul IFO Business Climate Index 93.3 93.7
UK Jul CBI Industrial Trends Survey -5 0
27 Jul NZ Jul NBNZ Bus Conf net % -48.8% n/f
Jun Merch Trade Bal NZDmn -25 -195
Aust Q2 Consumer Price Index %qtr 0.7% 0.7%
US Jun Durable Goods Orders 5.5% 2.5%
Latest Research papers/Publication
A question of capacity (25 July)
NZ Weekly Forex Outlook (25 July)
NZ Weekly Interest Rate Wrap-up (25 July)
RBNZ July OCR Preview (22 July)
Migration and the RBNZ (21 July)
NZ Weekly Forex Outlook (18 July)
NZ Weekly Interest Rate Wrap-up (18 July)
NZ Q2 CPI Review (14 July)
NZD: What really drives the currency? (14 July)
These papers/publications are available on Online Research on
Westpac Institutional Banks website (www.wib.westpac.co.nz)
(Previous days closing rates)
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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