AUD
The Aussie performed well last week, rebounding mid-week along with risk appetite whilst receiving support from economic data locally. The AUDUSD pairing has failed to find continued strength for the past two weeks, reflecting the significance of the risk-appetite correlation as equity markets slowed in November.

To open the week, ANZ Job Advertisements (5.2%) was significantly higher than expectations whilst Tuesday’s NAB Business Confidence (19) was also supportive of continued economic growth. Both figures reflect the desire of companies to recruit and invest, and will be reflected by greater capacity utilisation. This continued confidence in the economy reduces the dependence on investment from the Federal government and importantly allows the economy to avoid the liquidity traps that characterised other country’s economic downturns in the past.

The Australian Office of Financial Management announced last week that it will invest in mortgage backed bond sales by individual lenders to reduce the lending costs of smaller lenders who have been partially or wholly dependent on the securitization markets to fund mortgage lending. This announcement coincided with criticism by the government of three of the big four banks for increasing rates faster than the RBA. Treasurer Wayne Swan said that ‘competitive pressure’ will be placed on the Big Four lenders.

Westpac Consumer Confidence (-3.8%), Investment Lending (-0.6%) and the Trade Balance (-2379M) were all worse than expected. Home Loans (-1.4%), the Consumer Inflation Expectation (3.6%) and the Unemployment Rate (5.7%) were all better than expected and supported the rate rise by the RBA a week earlier. To close the week, economic data from China supported the local currency, in particular the Industrial Production figure was higher than expected.

The week ahead in Australia
Tuesday 15th – Dwelling Starts Q3, RBA Meeting’s Minutes, Westpac Leading Index.
Wednesday 16th – GDP Q3.
Thursday 17th – HIA New Home Sales, RBA Foreign Exchange Transaction.

AUDUSD
The pairing had significant volatility last week, starting the week at 0.9130 before continuing downwards until Wednesday where it reached levels of 0.9010. The pairing then recovered to close the week at 0.9160.

The week ahead in the US:
Tuesday 15th – NY Empire State Manufacturing Index, PPI, Net Ling-term TIC Flows, Capacity Utilisation, Industrial Production, NAHB Housing Market Index, API Crude Oil Inventories.
Wednesday 16th – MBA Mortgage Applications, Building Permits, Consumer Price Index, Housing Starts, EIA Crude Oil Stocks change, Fed Interest Rate decision.
Thursday 17th – Continuing Jobless Claims, Initial Jobless Claims, Leading Indicators, Philadelphia Fed Manufacturing Survey.

AUDGBP
The pairing tracked upwards for most of the week, opening at 0.5552 then falling in overnight trade on Tuesday where it reached 0.5540 before closing the week at 0.5608.

The week ahead in the UK:
Monday 14th – Rightmove House Price Index.
Tuesday 15th – CPI, Retail Price Index.
Wednesday 16th – Average Earnings Excluding Bonus, Claimant Count Rate, ILO Unemployment Rate, Jobless Claims Change.
Thursday 17th – Retail Sales, CBI Distributive Trades Survey.
Friday 18th – M4 Money Supply, Mortgage Approvals, Public Finances, Public Sector Net Borrowing, Total Business Investment.

AUDEUR
The pairing performed well last week, opening at 0.6144 and closing the week 0.6215.

The week ahead in the Eurozone:
Monday 14th – Employment Change, Industrial Production.
Tuesday 15th – ZEW Survey.
Wednesday 16th – CPI.
Thursday 17th – Construction Output.
Friday 18th – Current Account, Trade Balance, PPI (Germany), IFO – Business Climate (Germany), IFO – Expectations (Germany).

NZD
The New Zealand had a strong showing last week, rebounding with risk appetite as the threat of sovereign debt collapses in Greece and Dubai weakened. The Kiwi also performed well on the back of positive economic data and comments made by RBNZ governor Alan Bollard about future rate increases. The cash rate was kept on hold on Wednesday at 2.5%.

Economic data supported strength in New Zealand economy with Credit Card Spending (0.7%) and the Food Price Index (-0.3%) both higher than expected. Most importantly however were comments from the central bank about earlier than anticipated rate hikes saying that ‘if the economy continues to recover, conditions may support beginning to remove monetary stimulus around the middle of 2010’.

Growth in both housing and commodity prices have put upward pressure on inflation in New Zealand however Bollard acknowledged that ‘while business confidence has improved, actual business spending remains weak’. To close the week, strong economic data from China buoyed the New Zealand dollar.

The week ahead in NZ:
Thursday 17th – Business Confidence.

AUDNZD
The pairing opened at 1.2743 and remained relatively stable until Wednesday’s overnight trade where the Aussie fell sharply against the NZD, closing the week at 1.2587.

GBPNZD
The pairing opened the week at 2.2919 and tracked downwards for most of the week, closing at 2.2404.

EURNZD
The pairing opened at 2.0700 and remained relatively stable until Thursday morning when it fell sharply to close the week at 2.0220.

NZDUSD
There was significant volatility in the pairing last week, opening at 0.7149 and tracking downwards until Wednesday morning where it reached 0.7040 levels. The pairing then recovered to close the week at 0.7278.