Aud/cad Over Parity

Yen gains after BOJ stands pat; World Bank cuts China outlook, April lending looks weak; EUR falls on Papademos "grexit" mention Economic Data (JP) BANK OF JAPAN (BOJ) LEAVES TARGET RATE RANGE UNCHANGED BETWEEN 0.0% TO 0.10% (AS EXPECTED); Keeps economic assessment unchanged; Maintains asset purchase fund at ¥70T (JP) JAPAN APR MERCHANDISE TRADE BALANCE TOTAL: -¥520B V -¥471BE; ADJUSTED: -¥480B V -¥617BE (US) NORTH AMERICA SEMI EQUIPMENT INDUSTRY APR SALES BOOK TO BILL RATIO: 1.10 V 1.13 PRIOR (3RD CONSECUTIVE MONTH ABOVE PARITY, 1st decline in 7 months) (AU) AUSTRALIA APR DEWR INTERNET SKILLED VACANCIES M/M: -0.8% V -0.5% PRIOR (4-month low) (AU) AUSTRALIA MAR WESTPAC LEADING INDEX M/M: 0.4% V 0.0% PRIOR (AU) AUSTRALIA MAR CONFERENCE BOARD LEADING INDEX M/M: +0.2% V 0.0% PRIOR (SG) ...

Release: AUS CPI q/q (1Q) Consensus Forecast: 0.8% Previous: 0.0% Release: AUS CPI y/y (1Q) Consensus Forecast: 2.2% Previous: 3.1% Date/Time: 04/23/12 9:30PM EDT (01:30 GMT, 4/24/12) CPI Data Key to RBA Rate Cuts In the upcoming Asian session we will get the release of the Australian CPI data for the first quarter. We had a prelude, the curtain opener, to that report in Monday's mornings Asian session as producer prices in Australia fell 0.3% in the first quarter, a reading that was a good deal below the forecast a 0.5% gain. With producer prices falling that should filter down into weaker consumer prices in the coming quarter and should mean that inflation pressures remain subdued. In terms of consumer prices, CPI is expected to climb 0.8% in the first quarter, the the annual pace ...

FX Strategy Weekly Market Outlook => GBP: prel Q3 GDP to seal Nov MPC QE vote? => AUD vs CAD: correlation switches The preference of investors to buy USD/G10 on dips ahead of the G20 meeting following supportive comments by US Treas Sec Geithner indicates that the phase of USD weakness may at least be temporarily exhausted. Having said that, currencies remain in a state of flux and USD selling may well still be the preferred course of action if central bank discussions this weekend come to nothing and discord over external imbalances and exchange rate coordination remain subordinate to individual economic interests. However, with QE2 in the US now fully discounted and risk reversals showing demand for USD puts stalling, a widening in EU peripheral spreads and profit taking in risk ...

FX Strategy Weekly Market Outlook => USD priced for QE2 after Bernanke, pro-risk flows weigh => GBP: MPC minutes ahead, policy bias still neutral? Fed chairman Bernanke implicitly admitted in his Boston speech that the Fed was likely to push ahead with more QE on Nov 3 as risks of deflation are currently "higher than desirable". The limited scope for US short end yields to fall suggests that USD downside may now be limited. However, with QE2 now effectively priced in, the risk of a counter trend move cannot be ruled out, though a leveraging up of G10 and EM currencies threaten to squeeze the USD lower still backed by positive US Q3 company earnings and a rally in commodities. In general, a combination or reasonable US activity data and a Fed commitment to more accommodation should be ...

The Australian dollar rose to the highest level in six years against its Canadian counterpart and gained versus the US currency on the outlook for the faster economic growth in China. The Aussie and the loonie are both related to growth and considered to commodity currencies. Therefore they are generally driven by the same factors. The key reason for their different performance is their export markets. Australia mainly exports to Asia, particularly China, while Canada’s main trading partner is the US. The difference between the US and China’s economies is obvious. The US is struggling to recover, while China tries to contain its rapid economic growth. Thus Australia and its currency can more easily benefit from the factors, which favorable to the growth currencies. Canada’s currency, on ...