Australian FOREX Daily Outlook 01/06/2006

MARKET SUMMARY –1JUNE06 (05:00GMT)

• The Dollar recouped some of its losses against the major currencies in the overnight session, bouncing back after some positive comments from Secretary of State Condoleezza Rice, hawkish comments from the FOMC minutes, and a stronger than expected Chicago PMI index. Secretary of State Rice commented that the US would join Europe in talks with Iran if Tehran halted its uranium enrichment program. The FOMC minutes from the May 10 meeting highlighted the concern by the Federal Reserve that inflation pressures were somewhat greater than expected, however, no clear indication of intention was shown concerning a possible rate hike in late June. The Chicago purchasing managers index rose from 57.2 to 61.5, well above forecasts of a fall to 56.0 for the month of May. In other markets, the Dow Jones index rose 74pts and the NASDAQ increased by 14pts. Crude oil retreated on the strength of the US dollar, falling US74c to US$71.29 a barrel. Looking ahead, the ISM manufacturing index/prices are due out today as well as pending home sales.
  

• The Euro traded in a range of 1.2825 to 1.2902, before closing at 1.2865 in the New York session. Looking ahead, the consumer confidence survey showed much a stronger than expected level, improving to -9 from -10. Looking ahead, PMI manufacturing is due out today as well as GDP and unemployment figures.
  

• The Japanese yen traded in a range of 111.49 to 112.45 versus the dollar, before closing at 112.64 in the New York session.
  

• The Sterling traded in a range of 1.8710 to 1.8855, before closing at 1.8719 in the New York session. On the data front, the PMI manufacturing is due out today
  

• The Aussie traded in a range of 0.7487 to 0.7646, before closing at 0.7510 in the New York session. On the data front, the CAPEX number showed 0.6% for the first quarter, compared to a forecasted figure of 1.3%.

• Gold fell US$11.50 to US$649 an ounce.