Tuesday January 9, 2007 - 19:57:33 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning ReportNew Zealand Dollar NZD sees 0.6900 again
The NZD saw solid buying interest during yesterdayâ€™s local session. It opened around 0.6880 and pushed through 0.6900 as the morning progressed eventually posting a high of 0.6930. Helping nudge the currency higher was a return of carry trade interest as well as rumours of further Uridashi issuance. The NZD extended its gains slightly overnight but was capped at 0.6940 â€“ a technical resistance level. The Westpac â€“ McDermott Miller Employee Confidence index was also released overnight and posted the highest reading since March 2005. The optimism comes from a continuing tight labour market and expectations of a delay in the slowing of employment growth.
Australian Dollar: AUD shrugs off weak retail sales
The AUD was also a beneficiary of renewed carry trade interest yesterday as Japanese buyers allowed the currency to get a foothold above 0.7800. Despite a weaker-than-expected November retail sales result the currency continued to grind higher posting an intraday high of 0.7833. AUD/USD slipped a touch in offshore trading falling to a low of 0.7786 where good buying interest was found.
Major Currencies: USD firms slightly against majors
With little economic data to influence direction the market took its cue from technical levels and sentiment overnight. GBP
rallied initially after strong retail sales data (British Retail Consortium figures) but ran into plenty of selling interest around 1.9440/50 area and consequently retreated back toward the 1.9400 level. Yen
felt the heat against most currencies as many now believe that a possible rate hike by the BoJ will not be enough to counter the carry trade. As a result the dollar firmed against the yen to break through 119.00 en route to a session high of 119.55. The euro also struggled, after opening on its highs it ran into a wall of sellers around 1.3050 and promptly dropped back below 1.3000 before attracting buyers between 1.2990 and 1.3000.
US consumer credit exceeded expectations in November.
Consumers were particularly aggressive in accessing credit through November, raising an additional $12.3bn, possibly reflecting an early start to the Christmas retailing season. With a tight labour market in the US, petrol prices receding and the housing downturn â€śunder controlâ€ť, consumers remain willing to take on fresh debt.
Country Release Last Forecast
10 Jan 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
11 Jan Aust Dec Employment chg 36.2k 9k
Dec Unemployment Rate 4.6% 4.7%
Jan MI Inflationary Expectations 3.4% n/f
US Initial Jobless Claims w/e 7/1 329k 320k
Latest Research papers/Publication
â€˘ NZ Q4 Employment Confidence Index (10 January)
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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