Australian FOREX Daily Outlook 18/07/2006

CURRENCY TRADING SUMMARY –18JULY06 (05:00GMT)

• U.S. Dollar Trading (USD) rose against the major currencies in the overnight forex trading session as strong local data and Middle East tensions helped to strengthen the greenback. US industrial production rose by 0.8% in June, beating forecasts of a rise of only 0.4%. The New York Fed Manufacturing Survey retreated to 15.64 from a previous result of 29.01 and coming in worse than the estimated fall to 20. In other markets, the Dow Jones index rose by 8pts while the NASDAQ remained relatively flat up almost 0.5pts. Crude oil prices were weaker as hopes evolved that the fighting between Israel and Lebanon may end soon. Crude oil fell by US$1.73 to US$75.30 a barrel. Looking ahead, PPI data is due out today for the US.
  

• The Euro (EUR) traded within a low of 1.2511 and a high of 1.2658, before closing at 1.2518 in the New York session. On the data front, the Eurozone CPI rose by 0.1% in June right on expectations. Industrial production for May was up 1.6%, beating forecasts of a rise of 1.4%.
  

• The Japanese Yen (JPY) traded within a low of 116.09 and a high of 117.28 versus the dollar, before closing at 117.24 in the New York session. On the data front, the tertiary index came in better than expected at 0.5% compared to the -0.2% expected.
  

• The Sterling (GBP) traded within a low of 1.8177 and a high of 1.8388, before closing at 1.8198 in the New York session. Looking ahead, CPI numbers are due out today.
  

• The Australian Dollar (AUD) traded within a low of 0.7467 and a high of 0.7533, before closing at 0.7475 in the New York session.

• Gold (XAU) dropped by US$16.10 to US$651.90 an ounce in response to a stronger US dollar and weaker oil prices. Nickel once again was the standout performer in the base metal market, rising to a new record high.