Market Brief
The spot light yesterday was on the Australian dollar as it hit a 24 year high. Investors it seems were much attracted to currencies whose economies are currently battling rising prices amid strong growth. This is presently the case of the major economies within the Pacific rim. Singapore announced a 17 year high price surge accelerating at a 6.7 per cent rate in March. Malaysia and Hong Kong also posted inpressive inflationary figures although dampened by domestic intervention through subsidies. But it was Austrialia's level that attracted investors' eye. The country's underlying annual inflation rate surged to 4 per cent. Her consumer price index also jumped to 4.2 per cent. This trend increased the likelihood that the Rerserve Bank of Australia (RSB) will in all probability lift its interest rates when it meets next month. This putative rise in rates, which currently stands at 7.25 per cent, comes in the the back of 17 years of uninterrupted growth. Analyst are clearly seeing the backdraft effect of such an impressive record. This being said, there are some who see a decline in consumer spending at the end of the year which should trigger a downward trend in rates. The Aussie in the meantime is enjoying a comfortable rise. It could very well level at parity with the US dollar if the kernel of economic power shifts from the US to the Pacific rim, with China and Australia as natural co-sperheads.
Yesterday the Australian dollar hit a high versus the US dollar at $.9541 before sliding a little.
The rise of peripheral currencies is also marginally affecting European countires. The Swedish Kronar, for instance, rose to a two month high against the dollar at SKr5.822 after its Central Bank decided to leave the interest rates on hold at 4.25 per cent. Growth prospective along with an accompanying inflation, that could very well slip moderaltely out of control, has investors interested in the currency.
The Euro's performance was lacksidaisical. After a weaker than expected survey of the manufacturing sector many analyst perceived a slight distancing by some ECB officials from their traditional hawkish tone. The euro fell 0.6 per cent against the dollar. This moderate upswing of the dollar also helped the greenback to gain grounds against the Yen and the Swiss franc.
Trichet's comments to begin at 12:30 GMT should help investors decide if the dollar will continue to enjoy its current upswing or if this is only slight disturbance in what is still, overall beleived to be, a consensual decline.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 13,540.87 | -0.28 |
| Hang Seng Index | 25,825.43 | 2.12 |
| Shanghai Index | 3,583.03 | 9.29 |
| FTSE 100 Index | 6,083.60 | 0.81 |
| DAX futures | 6,830.00 | -0.31 |
| SMI Futures | 7,294.00 | 0.11 |
| DJIA futures | 12,736.00 | -0.09 |
| World Markets | Current Level | % Change |
| Gold | 904.26 | 0 |
| Silver | 17.16 | 0.12 |
| VIX | 20.26 | -2.92 |
| Crude wti | 118.14 | -0.14 |
| USD Index | 72.06 | 0.34 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Retail Sales (MoM) (Mar) | 4.30% | 5.50% | UK/8:30 |
| CBI INdustrial Trends Survey -Oders (MoM) (Apr) | - | 7% | UK/10:00 |
| Durable Goods Order (Mar) | 0.10% | -1.70% | US/12:30 |
| ECB's Trichet Speech | - | - | EZ/12:30 |
| New Home Sales (Mar) | 584k | 590k | US/14:00 |
| Bank of Canada Monetary Policy Report | - | - | CAN/14:30 |
Currency Tech
AUDUSD
R 3: 0.9657
R 2: 0.9536
R 1: 0.9517
CURRENT
S 1: 0.9540
S 2: 0.9391
S 3: 0.9318
EURJPY
R 3: 166.69
R 2: 166.17
R 1: 164.94
CURRENT
S 1: 163.30
S 2: 162.68
S 3: 162.16
USDSGD
R 3: 1.3792
R 2: 1.3626
R 1: 1.3599
CURRENT
S 1: 1.3472
S 2: 1.3318
S 3: 1.3138
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
