Australian FOREX Daily Outlook 04/09/2006

CURRENCY TRADING SUMMARY –4 SEPTEMBER06 (05:00GMT)

• U.S. Dollar Trading (USD) was initially stronger against the majors then gave up all its gains in the overnight foreign exchange trading session as Non-Farm Payrolls (NFP) came in better than expected, but the ISM manufacturing index disappointed.NFP came in at 128k, slightly better than the 120k estimate while the ISM manufacturing index came in at 54.5 from a 55 estimate. US unemployment came in on expectations at 4.7%. In other markets, the Dow Jones index rose by 83pts and the NASDAQ rose by 7pts. Crude oil fell by US$1.07 to US$69.19 a barrel as traders squared-up positions ahead of the long weekend in the US. Looking ahead, the US enjoys a labour day holiday today.
  

• The Euro (EUR) traded within a low of 1.2756 and a high of 1.2846, before closing at 1.2835 in the New York session. On the data front, the unemployment rate came in at 7.8% slightly worse than the 7.7%. Looking ahead, PPI is due out today.
  

• The Japanese Yen (JPY) traded within a low of 117.07 and a high of 117.48 versus the dollar, before closing at 117.11 in the New York session.
  

• The Sterling (GBP) traded within a low of 1.8958 and a high of 1.9068, before closing at 1.9056 in the New York session. On the data front, PMI manufacturing came in at 53.1 which was worse than the expected level of 53.7.
  

• The Australian Dollar (AUD) traded within a low of 0.7625 and a high of 0.7680, before closing at 0.7665 in the New York session. Looking ahead, building approvals are due out today.
  
• Gold (XAU) fell by US$1.60 to US$622.60 an ounce as profit takers came in to the market ahead of US long weekend.

Initial support at 607.67 (Aug 18 low) followed by 602.66 (Jul 24 reaction low). Initial resistance is now at 630.5 (Aug 23 high) followed by 633.1 (Aug 14 high).