Wednesday January 11, 2006 - 19:58:47 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
The NZD traded a 0.6928 – 0.6951 range during the domestic session yesterday, with the upside capped by the 50% retracement level of December’s decline. The market largely shrugged off a fall in the Westpac McDermott Miller employment confidence index in December, treading water ahead of key data releases next week. During the offshore session, however, a broadly weaker USD and the announcement of a further NZD200 million Eurobond issuance pushed the currency higher to establish a new three-week high of 0.6980. The NZD opens this morning at 0.6975.
Australian Dollar: AUD higher ahead of key employment data
The AUD regained 0.7500 during yesterday’s trade. In data releases, an increase in consumer sentiment of 2.6% for January represents a reversal of the December decline and offered the currency little direction, while today’s employment data is keenly awaited. A broadly weaker USD overnight saw the AUD rally from an overnight low of 0.7490 to 0.7567. The currency opens this morning at 0.7560.
Major Currencies: USD slips triggered by SNB comments
The USD slipped during Friday’s offshore session against most major currencies following remarks made by the Swiss central bank head. In a day with no major US data, traders reacted to Swiss National Bank (SNB) chairman Jean-Pierre Roth’s comments on interest rates, selling the USD and driving the USD/CHF down 0.6% on the day to 1.2719. The euro and yen were also stronger as a result of the USD sell off with the euro trading through 1.2100 to a 1.2145 high and the USD/JPY breaking 114.00 support falling to 113.91. In other news, the UK trade deficit jumped to a new record high of 6.0bn for November putting the Sterling under pressure against the USD and on crosses. The GBP opens at around 1.7640 this morning.
No US data to report.
UK trade deficit jumps to £6.0bn in Nov.
This is a new record high for the trade deficit, and with Oct revised up by £0.5bn to £5.1bn, net exports will not make the contribution to fourth quarter GDP growth that was initially expected.
Country Release Last Forecast
Aust Dec Employ chg/Unemploy Rate 28k/5.1% 15k/5.1%
Jan MI Inflationary Expectations 4.6% n/f
US Nov Trade Balance USDbn -68.9-66.6
Dec Import Prices -1.7% 0.2%
Initial Jobless Claims w/e 7/1 291k 320k
Dec Federal Budget USDbn -3.4 -6.4
Jpn Dec M2+CD Money Supply %yr 2.2% 2.1%
Eur ECB Repo Rate Decision 2.25% 2.25%
Q3 GDP Revision 0.6%a 0.6%
UK BoE Repo Rate Decision 4.5% 4.5%
Nov Industrial Production -0.7% 0.5%
Can Nov Trade Balance CADbn 7.2 6.8
Latest Research papers/Publication
• NZ Q4 Employment Confidence Index (11 January)
• 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)
• NZ HYEFU/BPS Preview (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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