Australian FOREX Weekly Outlook 31/03/2008

Heavy data week for the US, with ISM and Non Farm Payrolls.   BoE Gov King expected to re-iterate easing bias.  

31/03/08                                                                                                                                           

last week’s currency trading review

The Dollar continued in its run of poor economic data, mounting pressure on the greenback. Although Existing home sales figures to start the week were released at 7 month highs, data out of the U.S. failed to follow suit for the rest of the week with poor consumer confidence figures in particular. The Michigan Sentiment survey was released at 69.5 on Friday confirmed it lowest reading in 16 years. The Euro was buoyed by German IFO and a hawkish ECB in the middle part of the week pushing the Euro to an all time high of 1.5905. The Euro closed last week at 1.5783 having opened at 1.5335. The Japanese Yen was generally weaker and as always tracked equity markets. On the data front the CPI figures on Friday grew at there fastest pace in a decade. The USDJOY closed last week at 99.45 having opened at 99.30. The GBP was pressured following a dovish BoE concerned with a slowdown in economic growth for 2008. The GBPUSD traded with a low of 1.9923 having opened at 2.0173. The AUD had little data out for the week although ended the week marginally higher on rebounding commodity prices. The Aussie Dollar closed last week at 0.9223 having opened at 0.9144.

The forex trading week preview

In the States heavy data week coupled with another dose of volatility in global equities ensures an interesting time in trading. The story is widely expected to continue with ongoing poor reading out of the US prompting markets to price in future rate cuts from the Fed. Key releases in the form of Manufacturing ISM (Tuesday) and Services ISM on Thursday. As like ever first Friday of the Month, Non Farm Payrolls is sure to warrant plenty of attention. Fed Chairman Bernanke is expected to testify in front of a joint economic committee on Wednesday. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone questions arise as to whether the Euro can continue its recent run. Data includes PMI Manufacturing and Unemployment Rate on Tuesday, Retail Sales and Trichet Speech on Thursday. In the UK Governor King speaks on Monday with markets awaiting views of future policies. Other data will be in the form of PMI Manufacturing (Tuesday) and Services on Thursday. We will provide our previews and reviews of these data releases in the daily summary.

In Japan all eyes on the Tankan Survey for the first quarter of 2008 out on Tuesday. We will provide our previews and reviews of these data releases in the daily summary.

In Australia the RBA are widely expected to keep rates on hold come Tuesday, whilst Governor Stevens will testify in front of parliament on Friday. Retail Sales out on Friday for Australia.

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