Monday August 14, 2006 - 14:02:35 GMT
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Forex: Mellon FX Daily - U.S. EditionKey Points
â€˘ EUR-USD is consolidating at the $1.2740 zone â€¦
â€˘ CFTC data showed a record net long speculative position in EUR and GBP futures as of August 8.
â€˘ Relatively firm retail sales numbers boosting the NZD.
is consolidating in a 1.27-1.2760 range, with a lack of economic data and the summer holidays taking their toll. The $1.2765 and $1.28 levels are likely to be tough to clear on the topside. Below $1.27, additional supports are noted at the $1.2660 July 28 low, then the $1.26 zone. For today, the US data calendar is rather thin and the market will be looking ahead to the inflation numbers due over the next few days. The strong Eurozone Q2 GDP number had little impact. This had been on the cards given the stronger data from France and Germany, though German growth will have been augmented by the World Cup effect and a rebound in construction spending.
It is interesting to note that the weekly CFTC data showed large speculators in IMM EUR futures held a net long position of 92,108 as of last Tuesday - a new record. This extreme positioning could be one reason for the inability of the EURUSD to drive through $1.29. The CFTC data also showed a net long position in IMM GBP futures of 55,626, the second consecutive record. However, these outstanding long positions are likely to have been reduced in the wake of the USD rebound...
SNB President Jean-Pierre Roth said on Sunday that the SNB would continue its policy of gradual interest rate rises but that weakness in the CHF could make hikes more urgent. Roth cited high crude oil prices and Switzerland's tight labour market as two factors that could present difficulties and noted that the central bank still has work to do to reverse its loose monetary stance. Roth said that the growth forecast of just over 2.5% for 2006 now appeared â€śrather cautiousâ€ť.
New Zealand â€“
retail sales came in stronger than expected in June, rising 0.1% in nominal terms, against expectations of a 0.4% decline. Buoyant sales of winter clothing, with the coldest temperatures since June 1972, helped to lift the headline number. Vehicle dealer sales rose 0.1%, while fuel retailing declined 0.7%, after rising 5.1% in May. May retail sales were revised from a rise of 1.3%, to up 1.5%. The value of retail sales rose 0.9% in Q2, but, allowing for price movements, sales volumes fell 0.5%. The RBNZ is likely to see this as a justification of their stance that there is no room to cut rates.
extended up to 0.6375 into early European trading but sellers came in, keeping 0.6400 out of reach on initial attempts. The bigger barrier remains at the 0.6450 May high. The 0.63 level should offer support on the day.
July PPI input prices did pick up in response to the rise in oil and wholesale electricity prices, taking the m/m number up 1.1%. However, there was little sign that producers have been able to pass these costs on, despite indications from the PMI manufacturing report, with factory gate inflation at its weakest in three months. The July CPI and RPIX numbers on Wednesday are likely to be of more interest. GBP-USD
slipped ahead of the PPI number, testing the 1.8870/65 zone, with scope for a pullback to the 1.88 zone. EUR-GBP
found support at 0.6725, keeping the cross mired in a 0.6725-0.6770 range.
- The RICS housing market survey is out tonight, with forecasts of a rise to 30% y/y, from 28% y/y in June, in line with other indicators on the property market.
Data/event EDT Consensus*
GB RICS house prices (July) 19.30 30%
Latest data Actual Consensus*
NZ Retail trade (June) m/m +0.1% -0.4%
DE GDP (Q2 prel) q/q +0.9% +0.8%
GB PPI input (July) m/m +1.1% +1.0%
GB PPI output (July) m/m +0.1% +0.3%
GB PPI output core (July) y/y +2.8% +2.7%
EU GDP (Q2) q/q +0.9% +0.8%
* Consensus unless stated
ď›™2005, Mellon Financial Corporation Note: Although obtained from sources believed by us to be reliable, Mellon Financial Corporation and its affiliates cannot guarantee the accuracy or completeness of the information upon which this report is based. This report does not purport to disclose the risks or benefits of entering into particular transactions and should not be construed as advice in any specific instance. The views in this report constitute our judgement as of this date and are subject to change without notice.
Ian Gunner 44 20 7163 5996 06.40 EDT Monday May 31 2005
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