Australian FOREX Daily Outlook 23/04/2007

US Dow Jones reaches record high giving support to the USD. Weak UK retail sales figure causes a slight sell off in the GBP before regaining its losses. Aussie PPI set for release.

CURRENCY TRADING SUMMARY –  23 APRIL 07 (23:30GMT)
                                                                     

• U.S. Dollar Trading (USD) had a mixed day on Friday. On the back of record highs seen in the Dow Jones index, the USD found significant support against other currencies. The Dow Jones was up by 153.35 points (1.2%) whilst the NASDAQ was also up by a further 21.04 points (0.84%). Crude oil rose by US$0.90 a barrel to US$64.22. Looking ahead, a quiet day expected to begin the week as markets look to Tuesday to begin the data release.    

• The Euro (EUR) traded near record high of 1.3670 set in December 2004, reaching a high of 1.3636 on Friday. Investors were confident that the Euro would return to its bullish sentiment against the USD and JPY seen recently. Overall the Euro trade with a range of a low 1.3586 and a high of 1.3636 before closing at 1.3598 in the New York session to remain relatively unchanged.  

• The Japanese Yen (JPY) eased against the USD dropping by 0.3% on Friday. Markets have recently found a correlation of any mention to the Chinese Yuan and the need for a faster pace of appreciation tends to benefit the Japanese Yen, which is portrayed as a proxy for other Asian currencies. Overall, the JPY traded with a range of a low 118.25 and a high of 118.97 to close at 118.75 in the New York session. Looking ahead, Monday is relatively quiet before the sheer volume of data is set to increase on Tuesday.        

• The Sterling (GBP) initially eased against the USD on Friday on the back of a broadly stronger greenback and softer than anticipated UK retail Sales figure before regaining its momentum later on in the session. Markets had expected a figure of 0.5% with the actual figure coming in at 0.3% (the previous figure was revised higher to 1.6%). Overall the GBP traded with a low 1.9992 and a high of 2.0058 before closing the day at 2.0037 during the New York session.  

• The Australian Dollar (AUD) re-established its strength against the USD on Friday which it had paired during the previous session despite being subject to technical trading. Overall the AUD had traded within a tight range of a low 0.8340 and a high 0.8376 before closing near day highs at 0.8375 in the New York session. Looking ahead. PPI is scheduled for release on Monday with the previous figure being 0.2%. Markets are sure to pay attention to the data release ahead CPI (Tuesday) for any further indication of inflationary growth that may induce an RBA interest rate hike by 25 basis points.        

• The Turkish Lira (TRY) saw the Central Bank of Turkey publish the CPI on for the year end Friday, which was released at 7.48% (7.44% previous). Furthermore, Turkey’s trade deficit was released at - 31.747 Bln.  

• Gold (XAU) traded higher on Friday with a back wind from the commodities prices that surge together with the U.S stock markets. Gold rose by US$7.50 an ounce to US$695.80.