Australian FOREX Daily Outlook 06/06/2006

MARKET SUMMARY –6JUNE06 (05:00GMT)

• The Dollar strengthened in the overnight session against the major currencies after Federal Reserve chairman Bernanke expressed his concern in the rise of core inflation in the US, sparking fears that the Federal Reserve may raise rates this month. The US ISM services dropped to 60.1% in line with expectations, from 63.0% a month before. In other markets, the Dow Jones index fell by 199pts whilst the NASDAQ dropped 49pts. Crude oil rose by US27c a barrel to US$72.60 after Iran warned the US that any wrong move against it would threaten oil supplies in the region.
  

• The Euro traded in a range of 1.2905 to 1.2980, before closing at 1.2907 in the New York session. Looking ahead, PMI Services is due out today.
  

• The Japanese yen traded in a range of 111.43 to 112.29 versus the dollar, before closing at 112.24 in the New York session.
  

• The Sterling traded in a range of 1.8720 to 1.8880, before closing at 1.8722 in the New York session. On the data front, the UK PMI services eased in May to 59.2 from 59.7 which was in line with expectations.
  

• The Aussie traded in a range of 0.7470 to 0.7545, before closing at 0.7480 in the New York session. Looking ahead, the current account deficit is due out today.

• Gold fell by $1 to $638 an ounce on the back on stronger oil prices. Metals had a mixed trading session in general, with copper in particular buoyed by a mine strike in Mexico.