Australian FOREX Daily Outlook 04/08/2006

CURRENCY TRADING SUMMARY –4 AUGUST06 (05:00GMT)

• U.S. Dollar Trading (USD) was mixed against the majors in the overnight foreign exchange trading session as the USD initially weakened against the majors after release of the rate announcement by the ECB, then strengthened as investors took profit. US factory orders came in higher than expected, posting a 1.8% rise compared to an expected 1.2% increase. US ISM non-manufacturing survey fell to 54.8 from 56.8 compared to an expectation of remaining steady at 56.8. In other markets, the Dow Jones index rose by 42pts while the NASDAQ rose by 13pts. Crude oil prices softened after Tropical Storm Chris weakened in intensity. Crude oil fell by US35c to US$75.46 a barrel. Looking ahead, the all important non-farm payrolls are due out today as well as the unemployment rate.
  

• The Euro (EUR) traded within a low of 1.2744 and a high of 1.2832, before closing at 1.2802 in the New York session. On the data front, retail sales came in less than expected at 0.5% compared to 0.8% while the ECB announced that they would raise interest rates by 0.25% to 3.0%.
  

• The Japanese Yen (JPY) traded within a low of 114.57 and a high of 115.29 versus the dollar, before closing at 115.01 in the New York session.

• The Sterling (GBP) traded within a low of 1.8702 and a high of 1.8913, before closing at 1.8875 in the New York session. On the data front, the Bank of England surprised the markets by increasing their interest rates by 0.25% to 4.75%
  

• The Australian Dollar (AUD) traded within a low of 0.7595 and a high of 0.7640, before closing at 0.7610 in the New York session.
  
• Gold (XAU) fell by US$7.10 to US$644.90 an ounce after meeting resistance above US$650.00.