Australian FOREX Daily Outlook 19/09/2006

CURRENCY TRADING SUMMARY –19 SEPTEMBER06 (05:00GMT)

• U.S. Dollar Trading (USD) was initially stronger against the major currencies before retreating after poor current account and TIC data was released in the overnight forex market session. The US current account deficit posted its second biggest ever deficit increasing to US$218.4 billion for the June quarter, worse than the estimated -US$213 billion expected by the market. The TIC data did not help the greenback posting a fall to US$32.9 billion when the market was expecting a modest fall to US$70 billion. In other markets, the Dow Jones index fell by 5pts while the NASDAQ remained unchanged as investors stayed optimistic that the Federal Reserve will keep rates on hold. Crude oil rose by US47c to USD$63.80 a barrel as BP announced that production in the Gulf of Mexico in the Thunder Horse field will be delayed until mid-2008. Looking ahead, US PPI and housing starts are due out tonight.
  

• The Euro (EUR) traded within a low of 1.2660 and a high of 1.2710, before closing at 1.2710 in the New York session.
  

• The Japanese Yen (JPY) traded within a low of 117.83 and a high of 118.23 versus the dollar, before closing at 117.94 in the New York session.
  

• The Sterling (GBP) traded within a low of 1.8742 and a high of 1.8820, before closing at 1.8814 in the New York session.
  

• The Australian Dollar (AUD) traded within a low of 0.7510 and a high of 0.7557, before closing at 0.7555 in the New York session.
  
• Gold (XAU) fell by US$9.80 to US$582.80 an ounce as speculative buyers entered the precious metals market.