Monday November 27, 2006 - 20:11:40 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning ReportNew Zealand Dollar NZD crosses slide
After the weekendâ€™s bout of USD weakness the NZD come out an underperformer compared to the other major currencies. Although still making gains they were not enough to offset the NZD crosses falling. Yesterdayâ€™s local session saw the NZD remain well supported reaching a high of 0.6737. However overnight the NZD fell to lows of 0.6683 as investors took profits and in particular sold against the strengthening AUD. The NZD/AUD cross fell to a low of 0.8585 overnight. This morning the NZD opens near overnight lows at 0.6688.
Australian Dollar: AUD breaks through 0.7800 to new highs
The AUD spent half of yesterdayâ€™s local session making furtherstrong gains to a six month high of 0.7820. However the AUD was sold back to lows last night of 0.7763 as investors in UK and Europe opened Mondayâ€™s morning session taking profits on the weekâ€™s solid gains. The gold price continues to rise as the USD softens adding support to the AUD. The AUD opens today at 0.7780.
Major Currencies:. USD steady but fears of further weakness remain
The USDâ€™s eroding yield advantage continued to weigh against the currency yesterday before recovering slightly overnight when French Finance Minister Thierry Breton suggested that some vigilance was required, following the dollars recent decline. He further stated that the recent weakness would also be discussed at an upcoming meeting of European finance ministers. The dollarâ€™s recent moves have prompted a number of comments from various officials including Eurogroup Chairman Jean- Claude Juncker who stated he was not concerned by the euroâ€™s current level and that a critical point was â€ślengths awayâ€ť, and OECD Secretary General Angel Gurria who said that the euroâ€™s strength posed productivity and competition risks for Europe and that the dollar could drop further if the US current account deficit remains high.
Japanese corporate services prices up 0.1%yr in October.
That compares to a 0.3% pace in September, which was the high for the cycle so far. The series remains trifurcated in its detail. Clear readings on domestic pricing power, such as advertising costs, remain subdued. Clear readings on energy related sectors show solid gains on a year ago. And then there are the shades of grey in the middle, such as finance (up a little) and real estate (down a little). In short, corporates are still given the control of costs a heavy priority, delaying the recovery of prices, wages and the consumer in the process.
No major data to report
Country Release Last Forecast
Aust RBAâ€™s Dr Tony Richards
US Oct Durable Goods Orders 8.3% â€“6.0%
Nov Conf Brd Consumer Confidence 105.4 108.0
Oct Existing Home Sales â€“1.9% â€“1.0%
Nov Richmond Fed Index â€“2 2
Treasury Secretary Paulson speaks
Fedspeak: Bernanke, Plosser and Moskow
Jpn Oct Retail Trade %yr 0.7% 0.8%
Eur Oct M3 Money Supply %yr 8.5% 8.7%
Ger Dec GfK Consumer Confidence 9.2 n/f
Latest Research papers/Publication
â€˘ NZ Weekly Forex Outlook (27 November)
â€˘ NZ Interest Rate Strategy Weekly (22 November)
â€˘ Q4 RBNZ inflation expectation measures (21 November)
â€˘ NZ Weekly Forex Outlook (20 November)
â€˘ Great expectations (16 November)
â€˘ NZ Oct REINZ House Prices (16 November)
â€˘ NZ Q3 Retail Sales Review (15 November)
â€˘ NZ Interest Rate Strategy Weekly (14 November)
â€˘ NZ Weekly Forex Outlook (13 November)
â€˘ NZ Q3 HLFS Review (9 November)
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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