Australian FOREX Weekly Outlook 18/02/2008

All about Central Bank Minutes

18/02/08

last week’s currency trading review

The Dollar was broadly weaker to end the week on renewed fears of recession ’ following Ben Bernanke “dovish” testimony in front of the US senate banking committee. The Head of the central bank signaled more rate cuts were likely in order to counter downside risks. Added to poor readings in NY Manufacturing, and Consumer confidence at 16 year lows, the USD was heavily sold against a number of majors. The Euro traded at a month high versus the dollar on Tuesday as German ZEW survey was seen above expectations, adding to the notion that the EU will do well to whether the US economic slow down. The Euro closed last week at 1.4680 and a high of 1.4515. The Japanese Yen had it members unanimously vote in favour of holding rates at 0.5% citing inflationary pressures remain low. Overall the movement on the Japanese Yen once again tracked stock prices. The JPY closed last week at 107.82 having opened at 107.34. The GBP rallied in the early part of the week on positive PPI data, CPI seen at seven month highs, and a hawkish BoE quarterly report foreseeing inflation to remain above the 2% band in the next 2 years. The GBP closed last week at 1.9606 having opened at 1.9461. The AUD was boosted by a hawkish RBA Monetary Policy Statement viewing inflation to remain above the 2-3% target until 2010, prompting market to expect another 2 rate hike in 2008. The Aussie dollar gained further support on Thursday record low Unemployment figures of 4.1%, further adding to expectations of future rate hikes, breaking key levels on the top side. The AUD closed last week at 0.9042 having opened at 0.8945.

The forex trading week preview

In the States ongoing recession fears surround the sentiment on the US in the coming week. Key data releases will surround CPI, FOMC minutes, and housing data on Wednesday. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone much focus placed on Friday’s PMI manufacturing and services data for further indication of the health of the economy and relative interest rate movements. In the UK the BoE will release its minutes this week on Wednesday, key to further interest rate movements. We will provide our previews and reviews of these data releases in the daily summary.

In Japan BoJ minutes on Wednesday, Thursday Trade Balance, and Governor Fukui speaking on Friday will be key Japanese data this week. We will provide our previews and reviews of these data releases in the daily summary.

In Australia RBA minutes on Tuesday is the only key piece of data out this week. We will provide our previews and reviews of these data releases in the daily summary.