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USD traded softer to start the week as US stock prices tumbled
Tue, Aug 26 2008, 08:19 GMT
by Westpac Institutional Bank Team
News and views
USD traded softer to start the week as US stock prices tumbled and despite better than expected housing sales data, though a late squeeze trimmed losses and London’s holiday of course ensured poor liquidity. Financial stocks were mostly weak but with some striking exceptions. Lehman Bros sat 5% lower in late trade after Korea’s Financial Services Commission said a state-owned institution such as KDB should be cautious about foreign acquisitions. The failure of another small bank, Kansas-based Columbian Bank, also unnerved investors. But the GSEs posted gains well over 10% in the final hour on Wall St. The New Zealand dollar was rebuffed several times around 0.7090 and then looked soggy around 0.7040/45.
AUD/USD extended its late Asia bounce as far as 0.8690 amid broad USD selling but retreated to 0.8630/35.
EUR/USD rallied through 1.4800 on several occasions but could not extend, slipping to a more comfortable 1.4750.
USD/JPY set a firmer direction than other major pairs, sliding from near 110.00 in London to as low as 109.05 and recovering only modestly thereafter.
US existing home sales rose 3.1% in July. Existing home sales rebounded from the all-time low recorded in June, though some of the rise will be at the expense of new home sales, released tonight. Foreclosures now account for at least a third of sales, and the backlog of unsold homes increased to a new high of 11.2 months of supply. The median sale price slipped to a -7.1% yoy pace.
The IMF has trimmed its forecasts for world economic growth, according to an unnamed source. In a note prepared for next weekend’s G20 meeting, The IMF forecasts world growth of 3.9% this year, down from 4.1% in their official forecasts published last month.
UK markets closed for summer bank holiday.
Outlook
NZD should be range-bound to a little firmer near term, after recent NZ data fell short of the gloomiest scenarios. We are neutral on NZD TWI but NZD/USD should find buyers on dips.
Published on Tue, Aug 26 2008, 08:23 GMT
Archive
- UK PMI construction dives from 35.1 to 31.8 in Nov
Published On Wed, Dec 3 2008, 05:41 GMT - The NZD fell overnight in Europe with the poor news
Published On Tue, Dec 2 2008, 05:28 GMT - UK GfK consumer confidence rose 1 point to -35 in November
Published On Mon, Dec 1 2008, 05:30 GMT - NZD: Stable in a narrow 55 to 55.5 cent range yesterday
Published On Fri, Nov 28 2008, 05:40 GMT - US personal income and spending reports showed an increasingly cautious consumer
Published On Thu, Nov 27 2008, 05:48 GMT
Westpac Institutional Bank
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http://www.westpac.co.nz | natalie_denne@westpac.co.nz
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