Australian FOREX Daily Outlook 12/09/2006

CURRENCY TRADING SUMMARY –12 SEPTEMBER06 (05:00GMT)

• U.S. Dollar Trading (USD) was generally slightly firmer against the majors in the overnight forex session as Federal Reserve President William Poole commented on the US economy. In the absence of any data releases, the market focused on comments from Poole who stated that the US economy seemed to be robust despite a slowing housing market. In other markets, the Dow Jones index rose by 5pts while the NASDAQ rose by 7pts as comments from Poole helped to decrease market worries concerning energy costs. Crude oil posted its longest run of losses in 3 years falling US$0.65 a barrel to US$65.60 after the announcement by OPEC that it will leave production quotas unchanged and reports from Iran stating that they are willing to halt uranium enrichment for the time being. Looking ahead, the US trade balance is due out tonight.
  

• The Euro (EUR) traded within a low of 1.2649 and a high of 1.2740, before closing at 1.2702 in the New York session.
  

• The Japanese Yen (JPY) traded within a low of 116.62 and a high of 117.77 versus the dollar, before closing at 117.68 in the New York session. On the data front, machinery tool orders came in worse than expected at -16.7% compared to a -5.3% estimate. Looking ahead, consumer confidence is due out today.

• The Sterling (GBP) traded within a low of 1.8604 and a high of 1.8706, before closing at 1.8648 in the New York session. On the data front, UK PPI input came in at -1.2% compared to a -0.5% estimate. UK trade balance was slightly worse than the expected-6.2bln, coming in at -6.34bln. Looking ahead, UK CPI is due out today.

• The Australian Dollar (AUD) traded within a low of 0.7505 and a high of 0.7545, before closing at 0.7507 in the New York session.
  
• Gold (XAU) fell by US$20.00 to US$587.30 an ounce as the greenback strengthened and continued weakness in commodity prices.