Australian FOREX Daily Outlook 06/09/2006

CURRENCY TRADING SUMMARY –6 SEPTEMBER06 (05:00GMT)

• U.S. Dollar Trading (USD) was relatively unchanged against the majors in the overnight foreign exchange trading session given the lack of market-moving data from the US. In an interview, Federal Reserve member Poole stated the he wasn’t concerned with the slowdown in the housing market and reiterated the “wait and see” approach of the Federal Reserve with respect to interest rates. In other markets, the Dow Jones back from the Labour Day holiday rose by 5pts and the NASDAQ climbed 12pts. Crude oil fell by US59c a barrel to US$68.60 a barrel as news released highlighted a major new oil find in the Gulf of Mexico. Looking ahead, the ISM Non-manufacturing Index and Beige book are due out today.
  

• The Euro (EUR) traded within a low of 1.2798 and a high of 1.2872, before closing at 1.2817 in the New York session. On the data front, PMI services came in softer than expected at 57.1 compared to a 57.6 estimate.
  

• The Japanese Yen (JPY) traded within a low of 115.58 and a high of 116.19 versus the dollar, before closing at 116.08 in the New York session. On the data front, the yen enjoyed further strengthening against the USD on the back of unwinding of carry trades particularly against the New Zealand Dollar and the stronger than expected CAPEX number yesterday. Looking ahead, machine tool orders are due out tomorrow.
  

• The Sterling (GBP) traded within a low of 1.8915 and a high of 1.9068, before closing at 1.8937 in the New York session. On the data front, UK PMI services came in at 56.7 compared to a 57.6 estimate. Looking ahead, industrial production is due out today.
  

• The Australian Dollar (AUD) traded within a low of 0.7685 and a high of 0.7717, before closing at 0.7715 in the New York session. On the data, the Reserve Bank of Australia concluded their 2-day meeting deciding to leave interest rates on hold at 6.0%. GDP disappointed coming in at 0.3% compared to a 0.7% estimate. Looking ahead, unemployment is due out tomorrow.
  
• Gold (XAU) rose by US$14.30 to US$638.00 an ounce in response to increased demand from India and the Far East and fund managers returning from the US Labour day holiday.