Australian FOREX Daily Outlook 14/09/2006

CURRENCY TRADING SUMMARY –14 SEPTEMBER06 (05:00GMT)

• U.S. Dollar Trading (USD) moved lower against the majors in the overnight forex market as Secretary Treasury Paulson spoke last night on the international economy. In his speech given this morning, Secretary Paulson focused on the long-term progress across a range of areas. He highlighted that China should move to a more flexible currency regime. In other markets, the Dow Jones index rose 45pts and the NASDAQ climbed 11pts as stocks hit 4 month highs thanks to a rebound in energy stocks. Crude oil recovered slightly to finish up US21c to US$64.50 a barrel as the situation in Iran is seen to be improving. Looking ahead, US retail sales and initial jobless claims are due out today.
  

• The Euro (EUR) traded within a low of 1.2666 and a high of 1.2717, before closing at 1.2689 in the New York session. Looking ahead, the ECB meets but there will be no interest rate announcement. Also, Eurozone HICP is due out tomorrow.
  

• The Japanese Yen (JPY) traded within a low of 117.40 and a high of 118.14 versus the dollar, before closing at 117.68 in the New York session. On the data front, capacity utilization came in at -0.7% and industrial output at -0.9%.
  

• The Sterling (GBP) traded within a low of 1.8711 and a high of 1.8779, before closing at 1.8777 in the New York session. On the data front, the unemployment rate came out as expected 5.5%. Looking ahead, retail sales are due out today.
  

• The Australian Dollar (AUD) traded within a low of 0.7510 and a high of 0.7540, before closing at 0.7528 in the New York session.
  
• Gold (XAU) rose by US$2.20 to US$586.50 an ounce as technical buyers entered the market.

Initial support at 574.85 (76.4% retracement of the 543.50 to 676.35 advance) followed by 561.0 (Jun 20 low). Initial resistance is now at 593.33 (Sep 13 high) followed by 599.9 (Sep 12 high).