AUD
The Australian dollar went into last week as the toast of the currency markets however the champagne quickly went flat as the local currency found itself in unfamiliar territory. Not only did the Aussie fall sharply last week, but it was not correlated to risk appetite mid-week, highlighting the impact that interest rate speculation is having on the AUD.

 The week started well for the local currency with Japan’s economy posting strong growth in GDP (4.8%) whilst the US posted better than expected Retail Sales (1.4%) allowing the currency to post new highs for the last 15 months. By Tuesday morning Sydney time, however, the Aussie had started on a sharp descent.

 It was partly attributed to less hawkish comments by the RBA saying that further rate hikes ‘remained an open question’ which saw the interbank futures market reflect a reduced probability of a December rate rise, 63% down from 72% a week earlier. The central bank also mentioned that it is weighing up the affect of a strong AUD on the economy saying that a strong AUD will ‘constrain output and dampen inflationary pressure’ however that ‘a lengthy period with interest rates at a very low lever’ carries its own risk.

Australia’s Wage Price Index 3Q (0.7%) rose, however it was slightly lower than the previous month. By the end of the week, US equity markets were erasing gains made on Monday and the AUD continued to fall as risk appetite was being stripped from the market.

The week ahead in Australia
Monday 23rd – New Motor Vehicle Sales, Conference Board Australia Leading Index.

AUDUSD
The pairing started the week at 0.9333 and pitched higher to 0.9400 levels overnight on Monday, only to consistently fall to close the week at 0.9058.

The week ahead in the US:
Monday 23rd – Existing Home Sales.
Tuesday 24th – GDP, Real Personal Consumption Expenditures, S&P/Case-Shiller Home Price Indices, Consumer Confidence, Housing Price Index, Richmond Fed Manufacturing Index, FOMC Minutes.
Wednesday 25th – MBA Mortgage Applications, Durable Goods Orders, Initial Jobless Claims, Continuing Jobless Claims, Personal Consumption Expenditure, Personal Income, New Home Sales, Reuters/Michigan Consumer Sentiment Index, EIA Crude Oil Stocks.
Thursday 26th – Thanksgiving day.

AUDGBP
The pairing opened the week at 0.5584 and tracked downwards for most the week to close at 0.5515.
 
The week ahead in the UK:
Tuesday 24th – BBA Mortgage Approvals, Total Business Investment, BoE’s Governor King Speech.
Wednesday 25h – GDP, Index of Services.
Thursday 26th – CBI Distributive Trades Survey.

AUDEUR
The pairing opened the week at 0.6254 and dropped for most of the week to close at 0.6162.

The week ahead in the Eurozone:
Monday 23rd – PMI, PMI (Germany), ECB Trichet’s Speech.
Tuesday 24th – GDP (Germany), IFO (Germany), Industrial Orders.
Wednesday 25th – Gfk Consumer Confidence (Germany).
Thursday 26th – CPI (Germany), M3 Monetary Supply.
Friday 120th – Business Climate Indicator, Consumer Confidence, Economic Confidence.

NZD
The New Zealand dollar largely tracked risk appetite, remaining strong for most of the week until Thursday when it dropped sharply with overseas equity markets. Importantly, a report stated that the services industry contracted due to a fall in producer prices.

The country’s Labour Party weighed into the discussion about interest rates saying that it wanted a weaker exchange rate and that a focus on a weak inflation figure by the RBNZ was not enough. The OECD also commented about the RBNZ that ‘given a weak and fragile private demand, it is appropriate that monetary and fiscal plicies remain expansionary for the time being’.
 
The week ahead in NZ:
Thursday 26th – Trade Balance.
Friday 27th – RBNZ Inflation Expectations.

AUDNZD
The pairing opened the week at 1.2565, then fell to 1.2535 mid-week only to then regain the lost ground to close the week at 1.2569.

GBPNZD
The pairing opened the week at 2.2476 and had significant volatility until mid week when it found its feet to close the week at 2.2795.

EURNZD
The pairing opened the week at 2.0078 then remained relatively stable until the end of the week where it closed at 2.0422.

NZDUSD
The NZD opened the week at 0.7428 then peaked in overnight trade on Monday at 0.7520 levels and then progressively fell to close the week at 0.7303.