FXstreet.com

Morning Report

0

0

AUD/USD traded a roughly 0.6900 − 0.7040 range in London/NY

Tue, Oct 21 2008, 05:41 GMT
by Westpac Institutional Bank Team

Westpac Institutional Bank


News and views

The week started on a relatively quiet note, though there were good-size falls in EUR, GBP and CHF vs USD. US equities opened higher and remained there mid-afternoon NY. Broad improvement in risk appetite included a 36bp fall in 3mth USD LIBOR to 4.06%, its lowest fixing since 30 Sep. In testimony to a House committee, Fed chief Bernanke deemed suggestions of further fiscal stimulus to be “appropriate”, without endorsing specific suggestions. NZD/USD recovered from a dip to 0.6119 in London, rallying firmly back to the 0.6240-50 area in NY as the DJIA extended its gains to 240pts.

AUD/USD traded a roughly 0.6900 - 0.7040 range in London/NY, suffering amid heavy GBP and EUR selling but back to the higher end of the range in the NY afternoon.

EUR/USD had probed above 1.3500 in London but ran out of steam, retreating to the 1.3320 area in NY.

Equity gains and lower risk aversion lent less support to USD/JPY than might have been expected, with EUR/JPY selling seen in London. USD/JPY slipped from highs around 102.40 to 101.75.

Fed chair Ben Bernanke testimony. Looking very tired and drawn, the Fed chairman patiently dealt with a string of mostly ill-informed and pointless questions from law-makers in the House. His prepared testimony endorsed a further fiscal package to stimulate the economy.

US leading index rises 0.3% in Sep, but Aug revised down from –0.5% to –0.9%. The downward revision was due to orders and we suspect the assumption for Sep orders is also not weak enough so Sep will likely be revised down too (orders data not due till next week). Also the money supply component added almost 0.5 ppts to the Sep gain, which is probably a function of the recent financial turmoil and so is another reason to mistrust the apparently strong Sep signal.

German PPI accelerates to 8.3% yr in Sep. This surprise rebound from 8.1%yr in Aug was due to pre-announced utility bill increases offsetting the downward impact from crude energy prices.

UK public sector finances deteriorating. The Sep public sector net borrowing was £8.1bn, almost double the deficit position a year earlier. Full year borrowing in FY2008/09 will approach £60bn. There will be substantial further borrowing gains as the financial rescue packages hit the numbers.

Canadian wholesale sales fall 1.5% in Aug. This was the first fall since Feb, and was driven mainly by a sharp fall in autos.


Outlook

The 100bp cash rate cut we expect from the RBNZ on Thursday should help limit the scope of any NZD/USD rallies. At the margin, the lack of long NZD longs to be unwound still helps the currency versus AUD during risk aversion surges and vice versa.


Archive

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

Legal disclaimer and risk disclosure

No disclaimer available

Related reports

Weekly Focus - Is it strong enough? by Danske Bank A/S
Fri, Jul 3 2009, 15:00 GMT

Weekly Market Commentary - Libor and Official Interest rates are at their narrowest by Mizuho Corporate Bank
Fri, Jul 3 2009, 14:33 GMT

Your Summer Housing Market Update by Money and Markets
Fri, Jul 3 2009, 12:39 GMT

European Market Update - Spain June Services PMI: 41.2 v 39.1 prior by TradeTheNews.com
Fri, Jul 3 2009, 12:32 GMT

Daily Market Report - Risk aversion was the main theme of yesterday's trading session by Wachovia
Fri, Jul 3 2009, 12:25 GMT

audusd, indicator, eurusd, usdcad, eurgbp, gbpusd, nzdusd

View All

Related content

European Markets mixed, EUR rises and GBP lower
FXstreet.com | Fri, Jul 3 2009, 14:38 GMT

Forex: EUR/USD rebounds at 1.3980, back above 1.4000
FXstreet.com | Fri, Jul 3 2009, 11:46 GMT

CURRENCIES: Dollar Edges Higher In Thin Trade Ahead Of Holiday
Dow Jones | Fri, Jul 3 2009, 11:46 GMT

Forex: GBP/USD falls further to test 1.6300
FXstreet.com | Fri, Jul 3 2009, 11:20 GMT

2nd UPDATE: UK Service Sector Grows, End Of Recession Nears
Dow Jones | Fri, Jul 3 2009, 10:15 GMT

audusd, indicator, eurusd, usdcad, eurgbp, gbpusd, nzdusd

View All

Interested in forex trading? forex brokerage firms!


NordMarkets.com
Contact the broker/FDM
Open a demo account
ACM Advanced Currency Markets SA
Contact the broker/FDM
Open a demo account
MIG INVESTMENTS SA
Contact the broker/FDM
Open a demo account
Forex Capital Markets, LLC (FXCM)
Contact the broker/FDM
Open a demo account
IG Markets
Contact the broker/FDM
Open a demo account

GET CASH BACK FOR YOUR TRADES!   Learn more about the Pip Rebate Program

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.

Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

©2009 "FXstreet.com. The Forex Market" All Rights Reserved.