Australian FOREX Weekly Outlook 12/03/2007

12/03/07                                                                                                                                           

last week’s currency trading review

The Dollar experienced a relatively heavy data week beginning with Non-manufacturing ISM released on Monday. The actual figure was released at 54.3 down on the expected 57.5. On Thursday, the highlight of US Treasury Secretary Paulson trip to Asia was his address to the Shanghai stock exchange, where he advised that the Chinese open up financial markets in the hope to move away from a nation of low cost manufactured goods. However it was Friday that most interest surrounded the US markets with the release of key data. Beginning with the Unemployment rate, which came in slightly better than expected at 4.5%. Furthermore, the Trade balance was also made public with a narrowing of the deficit coming in near consensus at -59.12 bln. Finally the Non-Farm payrolls which was also made public on Friday, was released just under expectations, coming in at 97k however the previous was revised higher at 146k (from 111k). The Euro released the GDP (Q4) on Tuesday with the result being as expected at 0.9%. In Further news, the highlight of the Euro zones week was the ECB interest rate hike on Thursday to 3.75 % as expected. However, it was accompanying statements made by President Trichet usage of the phrase ‘accommodative side’ indicated a non-hawkish attitude by the ECB. The Euro closed last week at 1.3113 having opened at 1.3165. The Japanese Yen had a relatively quiet week in terms of data, yet was very much a presence in the market as the beginning of the week saw the ongoing unwinding of carry trades cause Yen weakness, up until investors re-entered risky bets on following the global stock rebound. The JPY closed last week at 118.08 having opened at 116.81. The GBP main focus surrounded the BoE interest rate announcement on Thursday where it was decided to keep rates on hold. The GBP closed last week at 1.9318 having opened at 1.9432. The AUD began its data week with the release of the Trade Balance coming in better than expected at -0.876 bln on Tuesday. Further more on Wednesday the RBA decided to keep interest rates unchanged whilst the GDP also came in strong at 1.0%. Overall the AUD closed last week at 0.7797 having opened at 0.7818.

The forex trading week preview

In the States a heavy data week is once again expected, beginning with Retail Sales out on Tuesday, whilst Wednesday sees the release of Current Account Balance. The Empire State Manufacturing and TIC flows are both scheduled for release on Thursday. Finally, the trend continues on Friday with Core CPI, Industrial Production and the Michigan Sentiment Survey all made public. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone begins its week on Tuesday with the release of Industrial Production and the German ZEW survey. ECB President Trichet is scheduled to speak in London (Wednesday). ECB Monthly Bulletin and Core CPI are due for release on Thursday. In the UK sees House Price Balance, and Trade Balance out on Tuesday. Whilst Wednesday finds the release Jobless claims and Average Earnings (incl. bonus) We will provide our previews and reviews of these data releases in the daily summary.

In Japan sees a frantic beginning to the week. GDP, Current Account and Trade Balance are all out on Monday. It is expected to ease with only Industrial Production (Wednesday) to follow.  We will provide our previews and reviews of these data releases in the daily summary.

In Australia a significantly quiet week is expected with only the Unemployment rate on Thursday expected to create any interest. We will provide our previews and reviews of these data releases in the daily summary.