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In an otherwise quiet session the euro consolidated on gains it made against the dollar

Fri, Nov 24 2006, 01:59 GMT
by Westpac Institutional Bank Team

Westpac Institutional Bank  |  View company's profile

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Quiet days trade for NZD on US Thanksgiving

After the previous night’s strong performance the NZD tracked sideways on a relatively quiet day due to the Thanksgiving holiday in the US. The NZD opened near highs of 0.6718 and moved down throughout the overnight session and opens today on lows of 0.6697. Today attention will turn to NZ October merchandise trade balance to offer some direction to the NZD in an already quiet week.

AUD fails to break resistance

The AUD saw a similar day to the NZD with Thanksgiving in the US meaning trading volumes were right down. The AUD opened at two week highs of 0.7761, which is seen as a key resistance level, and came off during the day as investors took profits on the previous weeks run. The overnight low in the AUD was 0.7733 although has recovered slightly to open at 0.7743 this morning. The recent low volatility in both the AUD and NZD has meant there has been a strong demand for carry trades as the risk of borrowing low yield currencies such the yen and buying high yielding currencies such as the NZD and AUD has fallen.

Euro holds onto gains against USD

In an otherwise quiet session the euro consolidated on gains it made against the dollar yesterday to post a 2006 high of 1.2975 following a very strong German business climate index result. Whilst the data saw the euro push higher there was no real appetite to break through the topside and it subsequently eased back to around 1.2940 where it opens this morning. The yen also continued its recent rally against the USD to test 116.00 but fell slightly short of that target with importers and short term profit takers all on the bid at the level.

No US data to report. Thanksgiving holiday.

German Ifo business climate index up from 105.3 to 106.8 in Nov. This is the highest in fifteen years. Both current conditions and expectations rose – have they forgotten about the VAT rise in January, or does it not matter anymore? Also, German GDP growth unrevised at 0.6% in Q3.

Euroland current account deficit €0.3bn in Sept. This represents an improvement from €2.1bn in August, thanks in part to lower oil prices.

UK business investment up 3.1% in Q3. The strongest in three years – we could see an upward revision to Q3 GDP tonight.

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Published on  Fri, Nov 24 2006, 02:03 GMT

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