Australian FOREX Daily Outlook 30/04/2007

EURUSD reaches record high of 1.3683 as poor US GDP highlights slowing growth. CPI released out of Eurozone.

CURRENCY TRADING SUMMARY –30 APRIL 07 (23:30GMT)

• U.S. Dollar Trading (USD) slumped against a basket of majors before rebounding late in the session subject to technical trading. Initial losses experienced by the USD were on the back of the lowest reading of economic growth in four years, with GDP for the first quarter coming less than expected at 1.3% (Prior: 2.5%), a significant indication of a slowing economy. In positive data for the US, the Michigan Survey showed consumer confidence to be a better for the month of April, lending some support to the greenback. Despite consumer sentiments, markets remained bearish on the currency. In US share markets NASDAQ rose by 2.75 points (0.11%) whilst the Dow Jones continued to gain up 15.44 points (0.12%). Crude oil rose by US$1.38 a barrel to US$66.44 as a foiled attack on a top exporter of Saudi Arabia’s energy infrastructure and US refinery glitches stirred supply concerns. Looking ahead key data is set to be released out of the US in the form of Core PCE as analysts are expecting a figure of 0.1% (Prior: 0.3%) for the month of March. In other news, Chicago PM is also made public later on today with a worse of figure of 54.0 (Prior: 61.7) the forecast.

• The Euro (EUR) reached a record high since its inception trading at 1.3683 during Friday’s session on the back of poor growth data out of the US. Overall the Euro traded with a range of a low 1.3586 and a high of 1.3683 before squaring its gains and closing at 1.3641 in The New York session. Looking ahead, a heavy data day is expected for the Eurozone beginning with the M3 money supply (Forecast: 9.7%, Prior: 10.0%). Consumer Confidence is also made public for the month of April as economist await a forecasted figure of -3 (Prior: -4). Finally, with so much attention placed on tightening by the ECB, key inflationary data will be the main focus on Monday as CPI is expected to come slightly worse at 1.8%, previous being 1.9%.

• The Japanese Yen (JPY) slid late in the session, despite poor growth data out of the US. In other markets, the EURJPY reached a fresh new high of 163.25. In Japanese specific data, Friday was filled with volume, as the BoJ kept rates unchanged, following generally poor data. Overall the USDJPY traded with a range of a low 118.88 and a high of 119.77 before closing the day at 119.64 in the New York session.

• The Sterling (GBP) found ground over the $2 mark once again before profits were paired ahead of the weekend. Many investors remained uncertain on the Pound as recent 26 year highs were distant to end the week. Overall the GBP traded with a range of a low 1.9867 and a high of 2.0044 before closing at 1.9967 in the New York session.

• The Australian Dollar (AUD) was range bound for much of Friday due to little data, as investors await the much anticipated RBA rate announcement later on this week. Overall, the AUD traded with a range of a low 0.8239 and a high of 0.8338 before closing at 0.8301 in the New York session.

• The Czech Crown (CZK) The Czech finance ministry raised its forecast for this year’s economic growth and said official interest rates were expected to rise slightly in the second half of the year as inflation creeps higher. Against the Euro, the CZK traded with a range of a low 28.045 and a high of 28.162.

• Gold (XAU) rebounded on Friday having tumbled to a two-week low in the previous session aided by a weakening dollar. Gold rose by US$3.80 to $681.80 an ounce.