Australian FOREX Daily Outlook 15/03/2007

CURRENCY TRADING SUMMARY –15 MARCH 07 (23:30GMT)

• U.S. Dollar Trading (USD) fell against most other majors on Wednesday, largely on the back of a sharp decline in the US share markets (before recuperating) amid concerns the U.S. sub-prime mortgage market may spread through the broader economy. In other news the Current Account (Q4) narrowed to 195.7 bln from the previous revised higher at 229.3 bln, saw the Dollar rally briefly. In US share markets, the NASDAQ recovered to end up by 21.17 points (0.9%) whilst the Dow Jones also was up by 57.44 points (0.47%). Crude Oil rose by US$0.08 to US$58.24 a barrel. Looking ahead, Thursday proves to be a busy day for economic data out of the US, beginning with Core PPI as markets are expecting an unchanged figure of 0.2% for the month of February. Further more, NY Fed manufacturing survey is also out for the month of March, the forecasted figure is at 17.75 down on the previous 24.35. Finally TIC flows are also made public on Thursday with investors sure to pay attention following the previous poor figure of 15.6 bln. Economists are expecting a stronger figure of 62.4 bln.

• The Euro (EUR) strengthened against the USD on Thursday. Overall the Euro traded with a low of 1.3177 and a high of 1.3246 before closing the day at 1.3228 in the New York session. Looking ahead, Core CPI is scheduled for release with markets expecting a figure of 1.8% slightly higher on the previous 1.7%.

• The Japanese Yen (JPY) dropped against the USD today after the positive Current Account report sparked profit taking on the Yen rise of more than 1% on Tuesday.
  USD gains were capped however, due to concerns about the U.S. housing market capped. Overall the JPY traded with a low of 115.76 and a high of 117.11 before closing the day at 116.72 in the New York session.

• The Sterling (GBP) experienced a very volatile day on Thursday. GBP rose broadly recovering from an eight-month low against the Euro in an edgy market where investors were split on whether they should take on risky carry trades positions. Overall the GBP, trade within arrange of a low 1.9214 and a high of 1.9372 before closing the day at 1.9352.
• The Australian Dollar (AUD) surrendered gains before strengthening against the USD. Overall the AUD traded with a range of a low 0.7803 and a high of 0.7874 before closing at 0.7847 in the New York session. Looking ahead, Unemployment rate is out of Australia with markets expecting a figure of 4.6% slightly higher than the previous of 4.5%. UPDATE: Unemployment Rate 4.6%

• Gold (XAU) Gold continued to drop reaching a one week low. Overall, Gold finished down by US$7.40 an ounce to US$642.00.

• The Swedish Kronor (SEK) The Dollar fell sharply today against the Swedish kronor. Attributed to comments made by Swedish Central Bank Governor Stefan Ingves, who said that only moderate rises in interest rates are needed over the next couple of years as inflation is expected to remain reasonable. He also added that the interest rate needs to rise further after six hikes last year and a hike in February to 3.25%, but he said that inflationary pressures were expected to be mild.