Monday February 13, 2006 - 20:17:32 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning ReportNew Zealand Dollar NZD contained in tight range
The NZD traded in a tight range yesterday just below 0.6800 as continued issuance of NZD-denominated Eurobonds helped offset downward pressure from a series of weak data released last week. Japanese names were also buyers of NZD, adding to the bid. The offshore session saw the currency hold its ground and briefly break through 0.6800 to post an intra-day high of 0.6807. Against the AUD it posted a 4 week high of 0.9229. This morning the NZD opens around 0.6795.
Australian Dollar: AUD dead despite volatile commodities
The AUD was kept to a very tight range for the vast majority of Mondayâ€™s trading despite gold and copper prices selling off significantly. Spot gold was down about US$6, Tokyo gold was limit down late in the day and copper in Shanghai sold off over 3% yesterday. The AUD is usually sensitive to commodity price movements but Monday proved an exception as the currency was held to a 0.7363 to 0.7378 range for almost the entire day. A late surge, primarily due to USD weakness, helped the AUD to trade a 0.7399 high and opens today at 0.7390.
Major Currencies: USD posts 6-week high vs euro
The USD climbed to a six week high against the euro in last nightâ€™s offshore session as traders bought USDâ€™s on expectations of further Federal Reserve monetary tightening. Federal Reserve Chairman Ben Bernanke is expected to signal more US interest rate increases on Wednesday when he speaks to the House of Representatives in his first public appearance discussing the US economy and monetary policy since becoming Fed chairman. The euro dipped through 1.1900 to a low of 1.1877 on USDbullish sentiment in New York trade, but opens this morning stronger at 1.1910.
Japan December current account surplus at Â¥1,748bn,
somewhat higher than median Â¥1,580bn to be up 8.6% y/y. The income account surplus of Â¥918bn was partly offset by the ongoing service deficit of Â¥174bn and a deficit of Â¥56bn in net transfers. Consistent with the customs data, the trade surplus was Â¥1,060bn with is down 16.7% in the year. Exports are up 18.7% y/y and imports surging 30.4% y/y.
No US data to report.
UK producer prices accelerate in Jan.
Input prices jumped 1.8% last month, their fourth consecutive monthly jump of over 1%, with energy prices the main driver. Output prices rose 0.4% suggesting some pass through of higher costs, although the core PPI was more subdued at 0.2%.
Country Release Last Forecast
NZ Q4 Real Retail Trade 1.3% 0.4%
Dec Retail Trade 0.9% â€“0.4%
Aus Jan NAB Business Survey 14 â€“
US Jan Retail Sales/ex auto 0.7%/0.2% 1.0%/0.9%
Dec Business Inventories 0.5% 0.6%
Fedspeak: Kroszner and Warsh
Eur Q4 GDP 0.6% 0.4%
Ger Q4 GDP 0.6% flat
Feb ZEW Survey 71.0 65.0
Can Dec Vehicle Sales 3.1% flat
Latest Research papers/Publication
â€¢ NZ Weekly Forex Outlook (13 February)
â€¢ NZ Economic Overview January 2006 (1 February)
â€¢ NZ Labour Market Preview (1 February)
â€¢ NZ Weekly Forex Outlook (30 January)
â€¢ NZ Terms of Trade:History & Significance (26 January)
â€¢ NZ RBNZ OCR Review (26 January)
â€¢ NZ Weekly Forex Outlook (23 January)
â€¢ NZ Q4 CPI Review/OCR Preview (18 January)
These papers/publications are available on Online Research on
Westpac Institutional Bankâ€™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. Â© 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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