• Home ::
• Fundamental ::
• Market View ::
• Morning Report

• Send
• Print
• Add To
• Rss

Morning Report

The New Zealand dollar popped its head over 0.7630

Wed, Jul 23 2008, 06:11 GMT
by Westpac Institutional Bank Team

Westpac Institutional Bank

News and views

The London morning saw the USD slightly offered as Europe digested the soft Amex earnings report, then followed a record $8.9bn loss at Wachovia. Later on though, hawkish comments from Paulson and Plosser and then oil’s fall to a low since 5 June (ahead of a vote in Congress on the Excessive Energy Speculation Act of 2008) saw the USD better bid. The New Zealand dollar popped its head over 0.7630 but then slid well below 0.7600 amid broad USD recovery.

The Australian dollar rose as far as 0.9792 in London but tumbled to just below 0.9700 in NY as the greenback bounced.

USD/JPY was lively again, both down on the softer USD early (106.05 low) then back up to 107.40 or so in late NY as US equities gained momentum – even Wachovia shares rebounded very strongly.

EUR/USD only saw modest upside in London, to a high of 1.5945 then was dumped to 1.5770 as NYMEX oil fell $5/bbl in short order, to around $126, before oil buyers returned.

US Richmond Fed index drops from –12 to –16 in July. The regional factory index was dragged to its lowest since the Iraq War and before that the 2001 recession by sharply weaker shipments and softer orders although the jobs measure was less negative in July. The associated retail and services sector surveys were also weak, the former dropping from –33 to –43 and the latter edging down from –14 to –15.

US house prices down 4.8% yr in May. This is the narrow Office of Federal Housing Enterprise Oversight price index, which has been falling since May 2007, but at a less steep pace than some of the other US house price measures.

Fedspeak. Hawkish Plosser was on the wires arguing that monetary policy needs to be retightened “sooner rather than later”, even before there are signs of economic turnaround. He said the Fed should pay more attention to headline inflation than core rates.

Japanese all-industry activity index rose 0.4% in May. This series incorporates known inputs on IP (+2.9%) and tertiary activity (-0.2%). The new information comes from the public sector (-0.1%) and construction (-1.7%). On the latter, the recovery in building activity following the policyinduced air pocket of last year looks to have stalled.

Canadian retail sales up 0.4% in May. Higher gasoline prices supported the report; clothing sales fell 0.7% and food sales were flat.

Outlook

We continue to like NZD/USD lower multi week especially on a TWI basis. However, the pair is likely to range trade now ahead of tomorrow’s all important RBNZ announcement.

• Download Full Morning Report

Published on  Wed, Jul 23 2008, 06:16 GMT

Archive

• The US dollar remained in favour in early overnight trade
  Published On Wed, Aug 20 2008, 06:18 GMT
• The US dollar wandered in tight ranges with an eye on commodities
  Published On Tue, Aug 19 2008, 06:38 GMT
• The Australian dollar hit its lows in the London morning
  Published On Mon, Aug 18 2008, 06:55 GMT
• USD/majors traded quietly in London until the US data
  Published On Fri, Aug 15 2008, 06:44 GMT
• The Australian dollar followed a similar pattern
  Published On Thu, Aug 14 2008, 06:06 GMT

[ View All ]

• More Reports from this Author
• More Reports from this Contributor

Westpac Institutional Bank  | ABN 33 007 457 14
http://www.westpac.co.nz | natalie_denne@westpac.co.nz