Australian FOREX Daily Outlook 05/09/2006

CURRENCY TRADING SUMMARY –5 SEPTEMBER06 (05:00GMT)

• U.S. Dollar Trading (USD) was weaker against the majors in the overnight forex trading session as the US labour day holiday meant thin trading and light volumes. The market took advantage of light trading conditions to extend gains against the US on the back of a relatively neutral Non-Farm Payrolls data release last Friday. In other markets, the NYSE and NASDAQ were both closed for Labour day holidays. Crude oil prices fell by US$1.17 to US$68.02 a barrel, as the market awaits possible sanctions against Iran. Looking ahead, the ISM Non-manufacturing index and the Beige Book are due out tomorrow.
  

• The Euro (EUR) traded within a low of 1.2841 and a high of 1.2868, before closing at 1.2865 in the New York session. On the data front, PPI for the month of July came in on expectations at 0.6%. Looking ahead, PMI services are due out today.
  

• The Japanese Yen (JPY) traded within a low of 115.90 and a high of 117.08 versus the dollar, before closing at 116.10 in the New York session.
  

• The Sterling (GBP) traded within a low of 1.9032 and a high of 1.9078, before closing at 1.9057 in the New York session.
  

• The Australian Dollar (AUD) traded within a low of 0.7680 and a high of 0.7721, before closing at 0.7707 in the New York session. Looking ahead, the Reserve Bank of Australia meet today for a 2-day meeting to discuss interest rates.
  
• Gold (XAU) rose by US$2.15 to US$624.85 an ounce in response to US weakness.

Initial support at 618.5 (Aug 31 low) followed by 612.8 (Aug 30 low). Initial resistance is now at 630.5 (Aug 23 high) followed by 633.1 (Aug 14 high).