Australian FOREX Daily Outlook 19/06/2006

MARKET SUMMARY –19JUNE06 (05:00GMT)

• The Dollar was mostly flat against the other major currencies as a narrower than expected US current account deficit data was overshadowed by comments from the Federal Reserve on inflationary pressures. The current account deficit narrowed for the first quarter to $208.7 billion from $223.1 billion in the prior three months. The market was expecting a figure closer to $224 billion. St. Louis Federal Reserve president William Poole again made known his concern over inflation stating that the US may be facing more inflation than what is showing up in the formal data. US consumer sentiment rose from 79.1 to 82.4 in June above forecasts which centred on a result nearer to 79.0. In other markets, the Dow Jones fell by 1pt and the NASDAQ retreated 14pts. Crude oil rose by US38c a barrel to US$69.88 on lingering fears of a nuclear dispute in Iran. Looking ahead, housing starts data are due out tomorrow.
  

• The Euro traded in a range of 1.2619 to 1.2671, before closing at 1.2642 in the New York session. On the data front, industrial production fell in April by 0.6% versus estimates of a gain of 0.4%. Looking ahead, trade balance data is due out today.
  

• The Japanese yen traded in a range of 114.57 to 115.19 versus the dollar, before closing at 115.19 in the New York session.
  

• The Sterling traded in a range of 1.8470 to 1.8560, before closing at 1.8500 in the New York session. On the data front, M4 money supply is due out tomorrow.
  

• The Aussie traded in a range of 0.7373 to 0.7445, before closing at 0.7386 in the New York session.

• Gold rose by US$11.40c to $581.70 an ounce on the back of a stronger oil price and bargain hunting.

Initial support at 0.7345 (June 14 low) followed by 0.7313 (61.8% retracement of 0.7015 to 0.7795 advance). Initial resistance is now at 0.7505 (June 9 corrective high) followed by 0.7547 (June 5 corrective high).