Australian FOREX Daily Outlook 14/11/2006

Major currencies weaken against Greenback. Gold and oil both dip. Market waits for a host of economic data.

CURRENCY TRADING SUMMARY –14 NOVEMBER 06 (23:30GMT)

• U.S. Dollar Trading (USD) was generally stronger against the majors in the overnight forex trading session as profit taking entered the market and the US budget came in on expectations. The US budget came in at -49.29bln compared to a -49bln estimate. The market is re-assessing the likelihood of central banks diversifying out of their USD denominated holdings. In other markets, the Dow Jones index rose by 23pts and the NASDAQ climbed 16pts as investors traded cautiously ahead of key inflation data out this week. Crude oil fell by US94c to US$58.65 a barrel as heating oil demand was not as high as expected and there is continuing doubt over whether OPEC will further cut oil supplies. Looking ahead, PPI and retail sales are due out tonight.
  

• The Euro (EUR) traded within a low of 1.2799 and a high of 1.2877, before closing at 1.2809 in the New York session. Looking ahead, GDP and the German ZEW survey are due out tonight.
  

• The Japanese Yen (JPY) traded within a low of 117.16 and a high of 118.27 versus the dollar, before closing at 118.11 in the New York session. On the data front, GDP came in much better than expected at 0.5% for Q3, beating estimates of 0.2%. Commentary released after the announcement suggested that the Japanese economy was nearing end of deflation.
  

• The Sterling (GBP) traded within a low of 1.9001 and a high of 1.9151, before closing at 1.9011 in the New York session. On the data front, UK PPI output came in less than expected at -0.2% for October compared to a 0% estimate. Looking ahead, CPI is due out tonight.
  

• The Australian Dollar (AUD) traded within a low of 0.7616 and a high of 0.7678, before closing at 0.7627 in the New York session. Looking ahead, consumer confidence is due out tomorrow.
  

• Gold (XAU) dropped by US$4.50 to US$625.60 an ounce as a response to a weaker oil and stronger USD.