Australian FOREX Daily Outlook 14/06/2006

MARKET SUMMARY –  14JUNE06 (05:00GMT)
                                                                     

• The Dollar continued its strength against the major currencies as core PPI rose higher than expected and retail sales came in on target. Core PPI rose 0.3% in May whereas markets expected a rise of only 0.2%. Headline PPI however rose 0.2% compared to 0.5% forecasted. Retail sales increased in line with expectations, lifting by 0.1%. In other markets, US stocks fell again as higher than expected core PPI numbers lead to interest rate fears inducing a sell-off of interest rate sensitive stocks. The Dow Jones was down 86pts, and the NASDAQ retreated 19pts. Crude oil finished lower by US$1.80 to US$68.56 a barrel. Looking ahead, US CPI numbers are out today with the market expecting 0.4% and 0.2% for the headline and core components respectively.
  
• The Euro traded in a range of 1.2531 to 1.2615, before closing at 1.2533 in the New York session.
  
• The Japanese yen traded in a range of 114.26 to 115.44 versus the dollar, before closing at 115.44 in the New York session.
  
• The Sterling traded in a range of 1.8326 to 1.8459, before closing at 1.8343 in the New York session. On the data front, the UK CPI rose 0.5% in May, more than the 0.4% rise that was expected. Looking ahead, unemployment figures are due out today and retail sales numbers are due out tomorrow.
  
• The Aussie traded in a range of 0.7372 to 0.7419, before closing at 0.7372 in the New York session. On the data front, the Westpac consumer confidence fell to 103.8.
  
• Gold plummeted by US$44.50 to US$566.80 an ounce, its biggest fall in 15 years as investors exited commodity markets amid fears of an economic slowdown. Copper closed 25% down on its high from this year, silver tumbled more than 13%, and palladium fell by 12%.