Economic Data

  • NZIER Business Confidence Q4 2009 +31.0 % from +36.0 % in Q3
  • New Zealand Capacity Utilization Q4 2009 91.07 from 88.42 in Q3
  • Japanese Outstanding Bank Loans in Dec -1.0 % y/y from + 0.2 % in November
  • Japanese Current Account Balance in November +76.9 % y/y from +42.7 % (expectations +62.8 %)
  • UK BRC Retail Sales in December + 4.2 % y/y from + 1.8 % Total sales + 6.0 %
  • UK RICS House Price balance in December +30 from +35 in November.
  • Australian Home Loans in November -5.6 % m/m from -1.4 % the previous month (expectations -0.4 %)

Market News

  • New Zealand business confidence survey showing a slight dip in the final quarter of 2009 but that was just a minor correction from the previous month. Still shows the economy in New Zealand is picking up and that general business conditions are expected to continue to improve over the next few months.
  • Canadian Prime Minister Harper pleased that the Canadian economy has stabilized and saw signs of growth. He feels that the time for an exit strategy could be soon and that he is not looking toward a second stimulus package. He is concerned about the rising Canadian dollar and that has dampened the economic recovery. On the other hand he is pleased with the way the job market has turned around so quickly.
  • Chinese Sovereign Fund Official came out saying that the dollar had hit “rock bottom” but the Yen still had room to fall. He added that it was most likely that both the US and China would raise interest rates in the second half of 2010. Moments later he said that he was expressing his own personal opinion. So the move we saw in the dollar when the market believed his comments to be official was totally reversed and the rates returned to exactly where they were from whence they came. One official definitely with “Egg Foo Young” all over his face.

Currencies

  • Dollar Yen was the main mover and shaker. After an initial move higher from 92.02 to 92.25 we saw a sell-off to 91.80 as Japanese players re-entering the market after the holiday weekend took profit on their long positions seeing the dollar at higher levels. The dollar then took a sharp upward spike, on the Chinese Sovereign Fund Official’s comments that were later said to be his own “personal” opinion, to a session high of 92.40 and then back down to 92.10. The remainder of the session saw the currency pair trade between 92.10 and 92.25
  • Euro, cable and dollar Swiss traded in quiet ranges apart from the blip on the above mentioned non-official comments.
  • Aussie unable to break the topside much above 0.9300 drifted lower on profit taking and then worse than expected housing data to around 0.9260 before the knee jerk drop to 0.9235 and back. Since then Aussie has resumed its upward climb and now trades around 0.9275.
  • Kiwi has followed the same trading pattern as the Aussie with minimal reaction to the slight drop in New Zealand Business Confidence to start the session.

Ranges

EUR/USD 1.4455 – 1.4518 USD/JPY 91.80 – 92.40 GBP/USD 1.6063 – 1.6115 USD/CHF 1.0154 – 1.0207 USD/CAD 1.0329 – 1.0359 AUD/USD 0.9235 – 0.9302 NZD/USD 0.7374 – 0.7419

Rates as at 12.00 am

EUR/USD 1.4483/86 USD/JPY 92.23/26 GBP/USD 1.6085/89 USD/CHF 1.0184/88 USD/CAD 1.03350/55 AUD/USD 0.9271/75 NZD/USD 0.7400/05 EUR/JPY 133.61/64 EUR/GBP 0.9003/07

Dollar Index 77.32 (+0.16)

Gold 1152.10/90

Oil 81.92