Monday September 12, 2005 - 21:42:19 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning ReportNew Zealand Dollar: NZD lower on soft euro
The NZD traded a tight range throughout the morning despite a drop in Q2 terms of trade, which was driven by high oil prices and falling export volumes. The NZD found itself under pressure in the afternoon from stop-loss euro selling dragging the currency to a 0.7055 intraday low. The NZD also lost ground against the yen early on as the yen received a boost from the landslide victory for Japan's ruling Liberal Democratic Party. It was more of the same range trading overnight as the market continued to speculate on the economic cost of Hurricane Katrina with the NZD trading a tight 28bps range opening lower this morning at around 0.7030.
Australian Dollar: AUD slips off highs
The AUD was taken lower on a soft euro and on Japanese strength yesterday coming off recent highs and testing 0.7700 support. Market news was dominated by Japan's Junichiro Koizumi's re-election, which is seen as positive for the Japanese economy and the yen, inspiring buying of JPY against the AUD taking the AUD to a 0.7718 session low. The AUD drifted lower in the offshore session dipping below 0.7700 support and opens lower this morning at around 0.7690.
Major Currencies: Dollar gains as pessimism subsides
The US dollar gained across the board overnight as a less-bearish view of the US economy emerged in the wake of Hurricane Katrina. The euro was sold to under the 1.2300 support level, eventually bottoming out around 1.2270 with upcoming European elections causing some jitters. Sterling also came under pressure throughout the London and New York sessions, but it appears to have found support and opens this morning around its lows of 1.8190. JPY lost ground slightly to the USD late in the day although the re-election of Japanese Prime Minister is seen as a long term positive for the yen. The JPY opens this morning around 110.30.
Energy boost to Japanese corporate good prices.
Rising imported energy prices lifted corporate goods prices 0.2% in August, up 1.7% yr from 1.5%yr in July.
No US data to report.
UK PPI softer than expected.
Although July data were revised higher, the August figures showed decelerating producer price inflation at both the input and output stages of production. The core output PPI eased from 2.2% yr to 1.9% yr, its lowest in over a year. There is little evidence here, then, that higher energy prices are pushing up other factory gate prices.
Country Release Last Forecast
13 Sep Aust Aug NAB Business Survey 6.6 -
US Aug Producer Price Index 1.0% 1.1%
Aug PPI Core 0.4% flat
Jul Trade Balance USDbn -58.8 -59.0
Aug Budget Statement USDbn -41.1 -47.8
UK Aug CPI %yr 2.3% 2.3%
Can Jul Trade Balance CADbn 4.9 5.1
14 Sep NZ Jul Retail Trade 1.2% 1.0%
Aust Aug Westpac-MI Cons Sent 7.6% n/f
Q2 Dwelling Commencements -3.1% 4%
Latest Research papers/Publication
NZ Q2 Terms of Trade Review (12 September)
NZ Weekly Forex Outlook (12 September)
NZ Weekly Interest Rate Wrap-up (12 September)
RBNZ Sep MPS Preview (9 September)
NZ Agribiz September 2005
NZ Weekly Forex Outlook (5 September)
NZ Weekly Interest Rate Wrap-up (5 September)
Oil: RBNZ in sticky situation (2 September)
NZ Weekly Forex Outlook (29 August)
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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