Australian FOREX Weekly Outlook 09/04/2007

09/04/07

last week’s currency trading review

The Dollar began the week with relatively minimal data released to the general public. The Dollar failed to receive any support until later on during the week with positive figures in the form of Unemployment rate and Non-Farm Payrolls on Friday. With positive jobs data, the general consensus showed that the FOMC was less likely to cut rates in the near term as inflationary pressures persist, despite the data being made public on Good Friday with thin trading present. The Euro remained fairly steady against the USD for most of the week, yet this was largely attributed to poor US data rather than positive feedback from the Eurozone. The Euro did break through key resistance levels of 1.3400 before easing slightly on Friday prior to the Easter long weekend with positive labour data made public from the US. The Euro closed last week at 1.3365 having opened at 1.3373. The Japanese Yen as always experienced a volatile week as many investors unwound carry trades earlier in the week before confidence returned to equity markets. With speculation rife that the RBA would hike in the near future as markets took advantage oh the interest rate differential as the AUDJPY pair reached 9 year highs of 97.50. The JPY closed last week at 118.65 having opened at 117.67. The GBP was also subject to plenty of volatility through out the week as markets had priced a 40% chance that the BoE would look to hike rates by a further 0.25%. This attributed to plenty of sterling strength for much of the week until the decision of the BoE to keep rates unchanged on Thursday caused investors to take profits. The GBP closed last week at 1.9646 having opened at 1.9687.The AUD continued to look bullish all week the RBA interest rate decision to maintain rates and leave them unchanged. Although initially the AUD experienced a sharp sell off reaching 0.8060 investors were confident to re-enter long AUD positions testing key levels of 0.8212 levels. Overall the AUD closed last week at 0.8170 having opened at 0.8074.

The forex trading week preview

In the States a relatively quiet week is expected out of the US with the FOMC minutes of the Mar 21 released on Wednesday to kick start proceedings. In other economic data markets will await the publication of Core PPI and the Trade Balance (Friday). In other news the G7 summit is scheduled to begin its two day meeting in Washington on Friday. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone plenty of market focus will surround the Eurozone this week starting with the GDP (Q4, Final) made public on the Thursday on the same day that the ECB will make an announcement on interest rates. Finally, Friday sees the release of Industrial Production out of the region. In the UK has a very quiet week scheduled with only the Trade Balance on Thursday expected to move markets. We will provide our previews and reviews of these data releases in the daily summary.

In Japan begins the week on Tuesday with the BoJ interest rate announcement on Tuesday. Furthermore, Wednesday finds the release of machinery orders and Current account. We will provide our previews and reviews of these data releases in the daily summary.

In Australia trading will experience a quiet week in terms of data. Only Unemployment rate on Thursday is expected to generate any market interest. We will provide our previews and reviews of these data releases in the daily summary.