Australian FOREX Daily Outlook 01/07/2006

MARKET SUMMARY –  1JULY06 (05:00GMT)
                                                                     

• The Dollar fell across the board against the majors in Friday trade as the PCE deflator came in on expectation. The core personal consumption price index (PCE deflator) came in at 0.2% with an annual rate of 2.1%. Personal spending rose by 0.4% as well as personal income, however, personal spending came in right on expectations whereas personal income came in higher than the 0.2% expected. In other markets, the Dow Jones index fell by 41pts while the NASDAQ dropped by 2pts. Crude oil ended higher after a strong demand by US motorists ahead of the July 4^th public holiday. Crude oil rose US33c a barrel to US$73.85. Looking ahead, ISM manufacturing is due out today.
  
• The Euro traded in a range of 1.2659 to 1.2788, before closing at 1.1.2790 in the New York session. Looking ahead, PMI manufacturing is due out today.
  
• The Japanese yen traded in a range of 114.44 to 115.22 versus the dollar, before closing at 114.44 in the New York session. On the data front, the Tankan survey came in a little slightly weaker than the expected 22 level, coming in at 21.
  
• The Sterling traded in a range of 1.8266 to 1.8497, before closing at 1.8485 in the New York session. Looking ahead, PMI manufacturing is due out today.
  
• The Aussie traded in a range of 0.7411 to 0.7430, before closing at 0.7425 in the New York session. On the data front, retail sales came in at -0.3% worse than the 0.2 expected.
  
• Gold rose by US27.10 to US$616.00 an ounce following the Federal Reserve hinting at a possible pause in rate hikes.