Monday January 8, 2007 - 21:50:22 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning ReportNew Zealand Dollar NZD touches 1 month lows
NZD/USD traded a tight 32 point range during the local session to start the week. After posting an intraday high of 0.6883, continued selling of NZD/JPY by investors saw the NZD slip to one month lows at 0.6851. NZD/JPY has been under enormous pressure as carry trades are unwound on expectations that Japanese interest rates will rise. Offshore trading saw the NZD post small gains as the USD dipped on news of a gas alert in New York. However these gains were capped at 0.6890 as the currency ran into good offers around this level.
Australian Dollar: AUD hurt by carry trade unwinding
Range trading was the main theme for AUD/USD yesterday. The currency found solid support at the 55 day moving average at 0.7782 but couldnâ€™t push through 0.7800. Like its Kiwi cousin, the AUD has been under pressure amid further unwinding of carry trades in AUD/JPY. Late afternoon saw AUD/USD push through 0.7800 on the back of offshore buying however offers at 0.7810 limited further gains during our day. Overnight saw little action in the currency but a weaker USD helped to lift the AUD off its lows.
Major Currencies: Gas leak in NY unsettles markets
The euro dropped below 1.3000 for the first time in six weeks to test key support at 1.2980 before rebounding to post a session high of 1.3036 after news of a gas leak in NY saw nervous traders pare back long USD positions. GBP was the main beneficiary of dollar weakness as it steadily climbed throughout the day to reclaim 1.9400. Against the yen the dollar initially rallied from its lows to an intra-day high of 118.81 before retreating after news of the gas leak. However, the USD never looked liked giving up too much ground and finished the session around 118.70.
No major data to report.
Country Release Last Forecast
9 Jan Aust Nov Retail Sales 0.8% 0.4%
Dec NAB Business Survey 14 n/f
10 Jan NZ Q4 Employment Confidence 126.7 n/f
Aust Jan Westpac-MI Cons Sent 11.8% n/f
Nov Trade Balance AUDbn â€“1.26 â€“0.8
US Nov Trade Balance USDbn â€“58.9 â€“59.7
Nov Wholesale Invent %mth 0.8% 0.4%
05/01/07 MBA Mortgage Applications
Latest Research papers/Publication
â€¢ NZ Q3 GDP Review (21 December)
â€¢ NZ Q3 Current Account Review (20 December)
â€¢ NZ Q4 Consumer Confidence (20 December)
â€¢ NZ Weekly Forex Outlook (18 December)
â€¢ NZ Q3 GDP Preview (15 December)
â€¢ NZ HYEFU/BPS Preview (13 December)
â€¢ NZ Q3 Current Account Preview (13 December)
â€¢ NZ Q3 Terms of Trade (11 December)
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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