Australian FOREX Daily Outlook 27/12/2007

BoJ minutes show concern of U.S. economic slowdown. Durable Good due out.    

CURRENCY TRADING SUMMARY –  27 DECEMBER 2007 (00:30GMT)

·                U.S. Dollar Trading (USD) eased against a number of majors on concerns slumping retail sales and falling house prices will sustain bets on further Federal Reserve interest rate cuts next quarter. In U.S. share markets the NASDAQ was up by 10.91 points (+0.40%) whilst the Dow Jones was also up by (+0.02%). Crude oil closed higher by US$1.79 a barrel to US$95.92. Looking ahead Durable Goods for the month of November the key data release on Thursday.

·                The Euro (EUR) gained versus the green back on a broadly weaker currency. With EU markets closed for the holiday period, the Euro traded on the back of other currencies. Overall the EURUSD traded with a low of 1.4392 and a high of 1.4506 before closing the day at 1.4489 in the New York session.

·                The Japanese Yen (JPY) saw the release of the BoJ minutes from the recent meeting. Although the minutes confirmed a 9 to 0 vote in order to keep rates on hold, reference was made to upside risks to prices, including oil, and the US economic slow down and its effect on the Japanese Economy. Overall the USDJPY traded with a low of 113.93 and a high of 114.39 before closing the day 114.32 in the New York session. A heavy data day is scheduled for Friday.    

·                The Sterling (GBP) was subject to slow upward grind despite UK market being closed, as the dollar eased on interest rate expectations. Overall the GBPUSD traded with a low of 1.9771 and a high of 1.9848 in the New York session.  

·                The Australian Dollar (AUD) also experienced a steady upward move as Aussie markets remained closed for Boxing Day. The AUDUSD traded with a low of 1.4392 and a high of 1.4506 before closing the day at 1.4489 in the New York session.  

·                Gold (XAU) surged on the back of higher oil prices. Its rise however was accelerated by a large gold producer’s statement that their hedge may be lifted. XAU traded with a low of 808.60 and a high of 825.60.