Sunday August 21, 2005 - 22:40:35 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning ReportNew Zealand Dollar: NZD quietly drifts lower
NZD/USD had a subdued day on Friday and finished the week off in the manner it started by continuing to move lower. There were few economic data releases to spark any FX volatility on Friday so the market traded on technicals. USD strength was the theme for the day with the NZD trading a 10-day low at 0.6920. The NZD opened at 0.6950 and ground higher to 0.6976 during local trading. This was short lived however, as the offshore markets sold into this NZD strength to take the currency lower throughout London and NY time; the low traded at 0.6920 but closed slightly higher at 0.6940.
Australian Dollar: AUD weakens to a one-month low
The AUD had a week of under performance and finished it off by trading a one-month low on Friday. With no Australian data releases to provide directional bias, the market kept the AUD in a tight range during Asian trading between 0.7516 and 0.7539. Offshore trading saw technically driven USD strength that took the AUD below 0.7500, levels not seen since July. The traded low was 0.7497 and AUD/USD closed out the week at 0.7515.
Major Currencies: USD continues to make gains
The USD rallied against major currencies for the fifth straight session on Friday, as investors continued to buy USD's following a week of strong US economic data. After tight ranges in the domestic session, traders chose to trade technical levels offshore due to an absence of major data releases. After trading an uneventful 29bps range in the domestic session, the euro was= sold in offshore trading falling to a three-week 1.2125 low against the USD. The euro opens this morning stronger at around 1.2170. The USD also posted a one-week high against the yen of 110.83 before trimming its gains to around 110.50 where it opens this morning.
Revisions to US factory and durable goods orders data. These annual benchmarking revisions left recent history a little stronger. Durable orders growth was revised up from 2.0% to 2.8% in June, and the broader factory orders measure was revised up from 1.0% to 1.4%.
Euroland trade surplus 6.5bn in June. This was the lowest June surplus since 2001, indicating that despite a stronger export performance out of Germany recently, the broader Euroland trade position has not shown a similar improvement. The USD rallied against major currencies for the fifth straight session on Friday, as investors continued to buy USD's following a week of strong US economic data. After tight ranges in the domestic session, traders chose to trade technical levels offshore due to an absence of major data releases. After trading an uneventful 29bps range in the domestic session, the euro was sold in offshore trading falling to a three-week 1.2125 low
Country Release Last Forecast
Pre-election Economic and Fiscal Update (18 August)
NZ Weekly Interest Rate Wrap-up (16 August)
NZD: A Commodity Story (15 August)
NZ Weekly Forex Outlook (15 August)
NZ Q2 Retail Sales Review (12 August)
NZ Q2 HLFS Review (11 August)
NZ Q2 QES and LCI Review (8 August)
These papers/publications are available on Online Research on
Westpac Institutional Banks website (www.wib.westpac.co.nz)
Latest Research papers/Publication
22 Aug Aust Jul New Motor Vehicle Sales -0.3% -2.0%
Eur Jun Current Account nsa bn -3.1 n/f
Can Jun Retail Sales -1.3% 1.5%
23 Aug NZ Q2 PPI (Outputs) 0.5% 1.3%
US Jul Existing Home Sales 2.7% -2.0%
Aug Richmond Fed Survey -3 5
Jpn Jun Tertiary Industry Index -1.5% 0.9%
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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