Australian FOREX Weekly Outlook 05/03/2007

05/03/07                                                                                                                                           

last week’s currency trading review

The Dollar experienced a heavy data week with the general trend surrounding a slowing of the US economy. Beginning with the Durable goods coming in softer than expected on Tuesday with the markets expecting a -2.8% the actual figure was much worse at -7.8% adding to speculation of a future rate cut. Consumer confidence came in better than expected. On Wednesday the release of the GDP dropped from the previous 3.5% to 2.2% whilst Chicago PMI was an even worse figure of 47.9 indicating further contraction of the Mid-west business activity. Manufacturing ISM surprised many on Thursday coming in better than expected at caused some USD strength. The actual figure was in 52.3 (expected: 50).Finally on Friday, Michigan sentiment came in softer than expected. The Euro experienced a relatively quiet week with CPI released on Wednesday coming in as expected with a 1.8% figure whilst unemployment rate came in better than expected. Manufacturing PMI released on Thursday came in as expected at 55.6. The Euro closed last week at 1.3165 having opened at 1.3191. The Japanese Yen experienced a heavy data week and was the biggest gainer last week. The Yen slid to an 11-week low against the USD. On the back of investors being risk-averse looking to unwind carry trades. Overall, the Yen closed last week at 116.81 having opened at 120.88. The GBP had a quiet week with the key data release being in the form of Manufacturing PMI released on Thursday increased adding to speculation of a BoE rate hike. The GBP closed last week at 1.9432 having started the week 1.9624. The AUD started the week trading above the 0.7900 level, reaching an 8-week high of 0.7940 on Tuesday. Friday proved a key data day with a better Retail sales figure released, yet a further decline in the Current Account. Overall the AUD closed last week at 0.7818 having opened at 0.7882

The forex trading week preview

In the States a heavy data week is expected with Non-manufacturing ISM out Monday, Federal Reserve chairman Bernanke is scheduled to speak on Tuesday, whilst Senator Paulson will speak on in Shanghai on Financial Markets (Thursday). A heavy Data day is expected on Friday with the release of Non-Farm payrolls, Trade Balance and Unemployment rate all set for release.   

We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone services PMI out on Monday whilst Tuesday sees the release of the GDP. A Big day is expected with the ECB interest rate announcement and the accompanying press conference. In the UK services PMI (Monday) is also set for release as well as an interest rate announcement (Thursday). Manufacturing Production set for release on Friday. We will provide our previews and reviews of these data releases in the daily summary.

In Japan a fairly quiet week is expected with Wednesday seeing BoJ’s Iwata is scheduled to speak. On Thursday Machinery orders will be made public. We will provide our previews and reviews of these data releases in the daily summary.

In Australia A fairly busy week is expected with the RBA interest rate decision out on Wednesday, along with the Trade balance. On Thursday GDP is set for release. In other news plenty of interest will surround the RBNZ call rate. We will provide our previews and reviews of these data releases in the daily summary.