AUD AUD AUD

Oz Forex Foreign Exchange | Weekly Market Watch

Last Week Recap
The Australian Dollar spent most of last week trading within a broad range of 0.6285 and 0.6520 against the U.S Dollar. On Tuesday, for the first time since August 2008, the Reserve Bank of Australia left the official cash rate unchanged at 3.25 per cent. After the announcement the Aussie rallied locally and continued the theme offshore reaching 0.6243 against the Greenback. Despite figures released mid-week showing the Australian economy slid backwards for the first time in 8 years the Aussie posted a high of 0.6520 as global equities, base metals and crude oil all stages a recovery. Unfortunately, the local unit failed to hold on to these gains as profit-takers moved in after a weaker-than-expected fall in New Home Building Approvals. There are still clear signs of strong technical resistance at 0.6550.

The New Zealand Dollar hit a six-and-a-half year low last week of 0.4906 against the Big Dollar as global equity markets slumped and traders moved into US treasuries. In the absence of local economic data the Kiwi took its direction from offshore events and moved back above US$50c momentarily once demand for the safe-haven Greenback diminished. The kiwi looks to be capped around the US51 cent area.

The Pound Sterling was weaker at 1.3956 against the US Dollar last week in anticipation of the Bank of England delivering another interest rate cut, and as expected they did. The official cash rate now stands at 0.5 per cent. The Central Bank also said it will pump money into the British economy by purchasing up to 150 billion pounds in government and corporate bonds. The sterling managed to hold above 1.4000 as London’s FTSE 100 recovered on the back of a rise in energy stocks.

For the first time since 1997 the Dow Jones fell below 7,000 along with London and German equity markets both posting losses. EUR/USD dipped to its lowest level since Feb 17 as Europe’s Central Bank lowered its lending rate from 2 per cent to 1.5 per cent and signalled there could be more cuts to come. In other news, the dollar index DXY (a gauge of the greenback's strength against a basket of major currencies) rose to a three-year high above 89.00 as poor financial news led by insurer AIGs record loss increased concern about the global credit crisis, boosting the dollars safe-haven allure.

Meanwhile, US employers eliminated 651,000 jobs in the month of February to post an unemployment rate of 8.1 per cent from 7.6 per cent in January. Policy-makers may need to expand government aid to the ailing financial sector after comments by US Federal reserve Chairman Ben Bernanke who said the banking system is not yet stabilized.

The A$ closed lower last week at 0.6400. NZ$ also closed lower at 0.4972. The Euro opened last week at 1.2630 and finished steady. The GBP weakened from 1.4294 to 1.4074. US$/JPY continued its recent strength to finish the week at 98.00.

The Week Ahead
USD: The data front in the early part the US week is fairly light with no significant releases due for release until mid to late week. No doubt the Dollar will take direction initially from offshore events and announcements. There are some announcements that are considered low key which starts on Tuesday with US Wholesale Inventories data for the month of January. All eyes this week will be on Friday when we see the release of the University of Michigan Consumer Confidence Survey. This survey tends to move markets on release. Also released on Friday is US Trade Balance data for the Month of January and US Import Price Index for the month of February.

AUD: This week all starts with the release on Tuesday NAB Business Confidence for the month of February. This survey is a measure of the current state of the business sector in Australia. Also released on Tuesday is the ANZ Job Advertisements for the month of February. This data is a monthly report measuring the number of jobs advertised in the major daily newspapers and internet sites in major Australian cities. On Wednesday is the release of Australian Home Loan Data and Investment Lending for the month of January. All eyes this week will be on the release of the Australian Unemployment Rate data for the month of February. The forecast is for the Unemployment Rate to increase from the previous month from 4.8% to 5.00%.

To view live charts follow these links:
AUD/USD
AUD/EUR
AUD/GBP
AUD/JPY
AUD/NZD

NZD: The only significant data out of New Zealand this week which will have an impact on the Kiwi Dollar will be Thursday’s RBNZ Official Cash Rate release and Friday’s release of Retail Sales figures for the month of January. On Thursday all eyes will be on the RBNZ with the forecast for the official cash rate to fall from 3.5% to 2.5%. Friday’s release of New Zealand Retail Sales data is actually a good early indicator for the direction of the New Zealand economy. Retails Sales figures results are always looked closely by the market as it provides a street level view of the spending patterns of the general population as reported by the retailers.

To view live charts follow these links:
NZD/USD

GBP: The data front in the early part the UK week is fairly light with no significant releases due for release until mid to late week. No doubt the Sterling will take direction initially from offshore events and announcements. There are some announcements that are considered low key which starts on Tuesday with the release of BRC Retail Sales Monitor and RICS House Price Balance for the month of February. On Wednesday is the release of NIESR Gross Domestic Product Estimate for the month of February. This data release is an unofficial estimate of UK GDP that comes out one month before the official release. Finally this week on Wednesday is the release of UK Visible Trade Balance for the month of January.

To view live charts follow these links:
GBP/USD

EUR: On the data front this week in Europe is fairly light. It kicks off the week today with the German Producer Price index for the month of January. This data can be an early indicator for inflation. A low expected PPI falling to -1.00%, will continue to suggest further economic slowdown. On Tuesday is the release of both German Consumer Price Index and German Trade Balance data for the month of January. Also released on Tuesday is Euro-Zone Producer Price Index for the month of January. On Wednesday will see the release of French Consumer Price Index for the month of February. Also released on Wednesday is the release of Euro Zone Industrial Production data for the month of January. On Thursday all eyes will be on the Euro Zone Retail Sales figures for the month of January.