AUD
The Australian Dollar was among a familiar setting last week as the AUD posted new highs for the past 14 months despite an absence of economic data locally. The currency was buoyed by Iron-Ore demand from China, better than expected US economic data and strong earnings results for companies in the US.

Treasurer Wayne Swan started the week by saying that the existing fiscal stimulus would be wound back as the local economy had ‘proven its resilience’ in the face of the global recession. This parallels the reduction in monetary policy stimulus provided by the RBA. He also noted that he ‘expects the economy to operate below capacity’.

Wall Street gave the Aussie a reason to climb as the DOW reached 10,000 as strong earnings results for JPMorgan Chase & Co. coincided with better than expected Retail Sales figures and marginally better than expected CPI for the US. The Australian Business Confidence figure fell however consumer confidence continued to increase and late in the week the RBA continued to fuel the speculation about further cash rate increases for November and December as Governor Glenn Stevens noted that the RBA couldn’t be ‘too timid’ to remove monetary stimulus. This speculation prompted Government bond prices to drop and the Australian Dollar to continue its ascent until Friday when it lost ground against the majors despite a strong Industrial Production figure out of the US.

The week ahead in Australia
Tuesday 20th – RBA Meeting’s Minutes.
Wednesday 21st – Westpac Leading Index, New Motor Vehicle Sales.
Friday 23rd – Import Price Index, Export Price Index.

AUDUSD
The pairing consistently tracked higher throughout the week until Friday when it weakened, It started the week at 0.9037 and closed at 0.9183.

The week ahead in the US:
Monday 19th – Fed’s Bernanke Speech, NAHB Housing Market Index.
Tuesday 20th – Housing Starts, Building Permits, Producer Price Index, API Crude Oil Inventories, ABC/Washington Post Consumer Confidence.
Wednesday 21st – MBA Mortgage Applications, EIA Crude Oil Stocks Change, Fed’s Beige Book.
Thursday 22nd – Initial Jobless Claims, Housing Price Index, Leading Indicators.
Friday 23rd – Fed’s Bernanke Speech, Existing Home Sales.

AUDGBP
There was volatility in the AUDGBP pairing last week, starting the week at 0.5695, peaking mid weak at the 0.5760 level, and closing at 0.5635.

The week ahead in the UK:
Tuesday 20th – CML Gross Mortgage Lending, M4 Money Supply, Public Sector Net Borrowing.
Wednesday 21st – Bank of England Minutes, CBI Industrial Trends Survey – Orders.
Thursday 22nd  – Retail Sales.
Friday 23rd – GDP, Index of Services.

AUDEUR
The pairing was less volatile last week, starting the week at 0.6134 and closing on Friday at 0.6164.

The week ahead in the Eurozone:
Tuesday 20th – PPI (Germany), Construction Output
Thursday 22nd – Current Account
Friday 23rd – IFO – Business Climate (Germany), Industrial New Orders.

NZD
The economic data for New Zealand broadly supported further strength in the economy. Both Retail Sales (1.1%) and CPI (Q3) (1.3%) were both significantly higher than expected while Housing Prices (1.9%) increased in August.

The RBNZ released a statement mid-week stating that it would remove the ‘emergency liquidity facilities’ such as the Term Auction Facility, a facility which allowed banks to borrow funds using risky assets and the Reserve Bank bill auction. Both no longer vital to stimulate lending as the global credit markets have improved allowing banks easier access to funding.

The CPI figure will test the RBNZ governor Alan Bollard’s earlier statement that the current quantitative easing would be maintained until late 2010 and analysts are pricing in earlier interest rate hikes.

The week ahead in NZ:
Tuesday 20th  – Visitor Arrivals.
Wednesday 21st – Credit Card Spending.

AUDNZD
AUDNZD started the week at 1.2304 and strengthened to close the week at 1.2375.

GBPNZD
The pairing performed poorly early in the week as the NZD strengthened starting the week at 2.1574 before the pairing strengthened to close the week at 2.1900.

EURNZD
The EURNZD paring was particularly volatile, however started the week at 2.0036 and closed at 2.0028.

NZDUSD
The NZD continued to find strength against the USD, starting the week at 0.7330 peaking late in the week at the 0.7490 level and closed at 0.7415.