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Weekly Market Watch - Monday, 5 January 2009
Subscribe to our weekly "Market Watch" newsletter. Last Week RecapThe Australian dollar traded most of last week between a range 0.6860 and 0.6960 against the U.S dollar before a spike in oil prices on New Years Eve pushed the local unit higher, this continued on Friday with continuing tensions in the Middle East. Also supporting the currency was a positive finish on Wall Street and stronger commodity prices. The Aussie touched 71 cents in offshore trade. Against the Euro, the Aussie managed to break through the psychological resistance level of 0.5000 to reach a high of 0.5120, this was thanks mainly to the Euro having its first weekly decline in one month against the Greenback on the back of a report showing recession is likely to deepen in the 16-nation region. Against the crosses the Aussie is higher against the Yen, Sterling and Singapore dollar.In 2008 the New Zealand Dollar at one point shed almost 40 percent against the Big dollar, from topping around US82 cents in February then falling to as low as just under US52 cents in November. As with the Australian dollar against the Greenback the Kiwi, for now, has found support at US52 cents. In thin trading conditions last week the Kiwi momentarily posted an intra-week high of 0.5887 but quickly lost most of its gains as oil lost three-percent in local trade on Friday. With commodities posting strong gains offshore the Kiwi quickly reversed losses and moved back higher to close at 0.5850 against the Greenback. Aussie currently outweighing its Trans Tasman neighbour at 0.8260 Last week the Pound Sterling hit its lowest level since April 2002 against the U.S Dollar at 1.4350 and against the Euro at 1.0204. The move was thanks mainly to speculation of deepening recession fears in the United Kingdom. Meanwhile, a report showed mortgage approvals had dropped to their lowest level in ten years. Against the Australian dollar the Pound closed the week at 2.0433. The Week AheadUSD: The data comes thick and fast this week as the Greenback waves hello to 2009. First off there are a number of Fed Speak opportunities on Monetary and Fiscal Policy on Sunday. This should spark some interest from the markets as it will give some clues on the direction of the US economy. This is followed with Tuesdays Pending Home Sales and ISM Non-Manufacturing Composite for December. Also released on the same day is the Federal Open Market Committee’s minutes from its last meeting. Fridays Change in Non Farm Payrolls for December (previous 533k; expected 480K) will also add some weight to some Greenback selling.AUD: We start 2009 in Australia with the release Wednesday of Retail Sales for November. The number is expected to come in fairly strong and close to previous expectations of 0.7%. This is followed Thursday with the Trade Balance for November. With little other significant data due out of Australia this week, the little Battler is expected to remain supported above 0.70 cents. To view live charts follow these links: AUD/USD AUD/EUR AUD/GBP AUD/JPY AUD/NZDNZD: Tuesdays Trade Balance for November is the only highlight out of New Zealand this week. Saying this Kiwi direction will be taken from offshore events and happenings. NZDUSD support at this stage is found at 0.5650 and 0.5400. First level resistance is the 0.60 mark. To view live charts follow these links: NZD/USDGBP: Three key events will have an impact on the Sterling this week. They are Tuesday’s Purchasing Managers Index Services, Wednesdays Nationwide Consumer Confidence Survey for December and Thursday all important Bank of England Interest Rate decision. The market is expecting some further aggressive action from Governor Mervyn King, with the futures markets pricing in a 50 basis point cut. This would bring the official cash rate down in the UK from 2% to 1.50%. Friday’s release of Producer Price Index will add further downside risk to the Pound. To view live charts follow these links: GBP/USDEUR: German Retail Sales for November get the EURO moving in 2009 with the figure seen improving from a previous reading of negative 1.6% to 0.4%. This is followed up on Tuesday with both the Euro Zone and German Purchasing Managers Index Services for December. Staying in Germany, the release Wednesday of the German Unemployment Change and Thursdays German Trade Balance should point towards a rocky road ahead for its inhabitants. Also released Thursday is Euro Zone GDP and the Unemployment Rate for November. To view live charts follow these links: EUR/USDJPY: No notable data slated for release out of Japan this week with the only possible key release being Fridays Leading Index. The Index is a composite of 12 major leading indices and includes account inventory ratios, machinery orders, stock prices etc. Many traders expect the range for the USDJPY to remain within the 90 to 92. To view live charts follow these links: JPY/USDCAD: Top tier data out of Canada comes out later in the week and includes Thursday’s Ivey Purchasing Managers Index. The figure is expected to come in lower than the previous of 40.20 with the figure expected to come in around the 37.5 mark. Adding further to the Canadian Dollar will be Net Change in Employment and the Unemployment Rate for December. The Unemployment Rate is seen rising 0.2% to 6.5%, adding more fuel to the fire that the Canadian economy has entered a prolonged recession. To view live charts follow these links: CAD/USD
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