Thursday December 8, 2005 - 00:46:02 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning ReportNew Zealand Dollar NZD: reversal of fortune
It was a different sort of day for the NZD yesterday, and a complete turnaround in recent sentiment. After opening the day around 0.7175 NZD traded a tight range for the morning, then after bearish comments from ratings agency Standard & Poor’s NZD dropped sharply, falling to 0.7100 in half and hour. Choppy trading conditions followed for most of the local afternoon session. On the open of the London session NZD was sold heavily once more down to the 0.7060 level before finding support which held for most of the offshore sessions.
Australian Dollar: AUD sold but supported
The AUD opened around 0.7540 and traded sideways for much of the morning. In the early afternoon AUD was sold sharply down as the USD was bought across the board. AUD found support at 0.7485 where is bounced twice, but this failed to hold early in the offshore session as AUD was sold to a 0.7458 low. AUD managed to recover slightly in choppy trading for the remainder of the session and AUD opens this morning around 0.7475.
Major Currencies: Dollar gains in quiet trading
The dollar finished the session broadly higher but moved within tight ranges in quiet trading, supported by a sell-off in AUD and NZD. Against the yen, the USD edged back toward the 32 month high of 121.40 yen but ran out of momentum to push through that level. Losses in the AUD and NZD weighed on the euro, which fell from around 1.1770 to this morning’s open of around 1.1720. There was very little economic data to influence market direction.
No major US or other international data to report from last night.
Just one minor data release: US corporate layoff announcements totalled 99.3k in November, down 5% on the same month a year ago. That is the fourth year of improvement, consistent with most other data showing the US labour market is quite strong.
Country Release Last Forecast
NZ RBNZ Monetary Policy Statement 7.00% 7.25%
Aust Nov Employment chg -19.8k 40k
Nov Unemployment Rate 5.2% 5.2%
US Initial Jobless Claims w/e Dec 3 320k 310k
Jpn Nov M2+CD Money Supply %yr 2.0% 2.1%
Oct Machinery Orders -10% 6%
Ger Oct Industrial Production 3.1% 2.0%
UK BoE Rate Announcement 4.5% 4.5%
Can Nov House Starts ‘000 207 215
Oct New House Price Index 0.6% 0.4%
Latest Research papers/Publication
• NZ Weekly Interest Rate Wrap-up (6 December)
• RBNZ Dec MPS Preview (5 December)
• NZ Weekly Forex Outlook (5 December)
• NZ Weekly Forex Outlook (28 November)
• NZ Weekly Forex Outlook (21 November)
• NZ Q3 Retail Sales Review (15 November)
• NZ Weekly Forex Outlook (14 November)
• NZ Housing Equity Withdrawal (10 November)
• NZ Q3 HLFS Review (10 November)
• NZ Q3 QES and LCI Review (8 November)
These papers/publications are available on Online Research on
Westpac Institutional Bank’s 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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