Monday January 9, 2006 - 20:35:30 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning ReportNew Zealand Dollar NZD at 3-week high on soft USD
Pressure on the USD following Friday’s soft employment report continues to support the NZD, with the currency finding a base at 0.6900 and strengthening to a three week high during yesterday’s trade. The currency rallied over the course of the domestic session, establishing an intraday high of 0.6940. This high remained intact during offshore trading as the USD recouped some of its recent losses against other major currencies.
Australian Dollar: Gold at 25 year high offsets soft data
The AUD also continues to benefit from a softer USD. Despite corner. soft data releases yesterday showing weaker than expected 0.1% decline in retail sales for November and a seasonally adjusted 2.4% fall in job ads in December, negative impact from the data was offset by record highs in base metal prices and a 25 year high gold price of $548/oz. The AUD strengthened from 0.7514 to 0.7544 during the domestic session, before falling back overnight. The currency opens this morning at 0.7535.
Major Currencies: USD recovery in thin trading
The USD rebounded on Monday in thin trading, recouping some lost ground after last weeks sharp sell-off. In a day with no major US economic data, the USD rallied against the euro and yen ahead of scheduled Fed speak by the Atlanta and Kansas City Fed Presidents. Despite a rise in Euroland retail PMI for December the euro fell to a 1.2054 intraday low on Monday following its largest weekly rise in two and a half years last week. The euro and yen open at around 1.2085 and 114.45 respectively this morning.
Euroland retail PMI rises to 52.2 in Dec.
This series has only been around for two years. However the latest reading is the strongest on record, so should be regarded as a tentative sign that
European consumers might be stirring into life.
UK house prices up 1.0% in Dec.
This particular house price measure has not posted a decline since May last year, and the annual rate is up 5.1% yr, from the low of 2.3% yr in July. More evidence that the UK housing sector might be turning the corner.
Country Release Last Forecast
Aust Nov Trade Balance AUDbn –1.3 –2.5
Dec NAB Business Survey 11.2 n/f
US Nov Wholesale Inventories 0.2% 0.5%
Jpn Nov Household Spending %yr 2.0% 1.7%
Ger Jan ZEW Survey 61.6 55.0
UK Dec BRC Retail Sales Monitor
Can Dec Housing Starts 220k 215k
Nov Building Permits 1.2% flat
Nov New Housing Prices 0.7% 0.5%
Latest Research papers/Publication
• NZ Weekly Forex Outlook (9 January)
• NZ Weekly Interest Rate Wrap-up (9 January)
• NZ Q3 GDP Review (22 December)
• NZ Q3 Current Account Review (21 December)
• NZ Q4 Consumer Confidence (21 December)
• NZ 2005/06 HYEFU/BPS Review (19 December)
• NZ Weekly Forex Outlook (19 December)
• NZ Q3 GDP Preview (16 December)
• NZ Nov REINZ Housing Review (16 December)
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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