Australian FOREX Daily Outlook 27/04/2007

The US dollar show signs of strength across the board, as all markets focus switches to Japanese data including BoJ rate announcement. US to release GDP today.

CURRENCY TRADING SUMMARY –27 APRIL 07 (23:30GMT)

• U.S. Dollar Trading (USD) rallied across the board despite sentiment remaining negative on the US economy ahead of further data release. In US share markets the NASDAQ was up by 6.57 points (0.26%) whilst the Dow Jones continued to gain, rising by a further 15.61 points (0.12%). Crude Oil gained irrespective of a stronger USD, rising by US$0.32 a barrel to US$65.38. Looking ahead key inflationary data is set for release today with GDP. Economists are expectant of an expansion of 1.8% rise, which if released on consensus would constitute a fourth consecutive quarter of below-trend economic growth.

• The Euro (EUR) fell by 0.2% against the USD as little economic drivers played on the currency. As a result investors sought to square profits despite the Euro trading once again just under all time highs of 1.3670. Overall, the Euro traded with a range of a low 1.3583 and a high of 1.3655 before closing the day at 1.3602 in the New York session.

• The Japanese Yen (JPY) slid against a basket of currencies, once again reaching a record lows beside the Euro of 162.65, ahead of Friday heavy slate of data and BoJ call rate. Overall the JPY traded with a range of low 118.54 and a high of 119.67 before closing the day at 119.58 in the New York session. As mentioned, Friday proves to be a critical data for the Yen with significant economic drivers the focus. Beginning with Household Spending (Forecast: 0.8%, Prior: 1.3%), Core CPI (Forecast: -0.2%, Prior: -0.1%), PMI Manufacturing (Prior: 52.5), Unemployment rate (Forecast: 4% unchanged), Industrial Output (Forecast: 1.1, Prior: 0.7), Retail Sales (Forecast: -0.6, Prior: -0.2%) and Finally the BoJ rate announcement which many analyst expect to remain unchanged at 0.5%, yet as always accompanying statements made by officials may in fact cause some movement.

• The Sterling (GBP) fell against the USD falling below the $2 mark as a broadly stronger greenback rallied. Investors said UK positive housing data released earlier in the day had been eclipsed by external forces as investors covered short-dollar positions, reflecting frustration at the inability to scale record high against the US currency. Overall, the GBP traded with a range of a low 1.9893 and a high of 2.0059 before closing at 1.9912 in the New York session.

• The Australian Dollar (AUD) showed significant strength early in the Asian session, before easing during the European session. Overall the AUD traded with a range of a low 0.8249 and a high of 0.8354 before closing the day at 1.9912 in the New York session.

• The Czech Crown (CZK) central bank kept interest rates on hold for a seventh consecutive month today but gave markets the strongest signal to date it was ready to tighten policy soon to keep inflation at bay. The Czech crown firmed slightly on the session, trading at 28.120 to the Euro after the rate decision from 28.140 just ahead of it

• Gold (XAU) tumbled 1.8% to a two-week low as a higher dollar and a bullish stock market prompted funds and investors to switch money out of the metals futures. Gold fell by US$9.40 an ounce to US$678.00