Major General Robert Rennie CB CMG DSO MVO VD (December 15, 1862 – December 17, 1949) was a Canadian businessman and army officer. (wikipedia)
The report will be positive for the dollar. Along with a good prospect for the GDP report due Oct. 28, we will see the dollar remain strong this week.
As long as economic data meet and beat expectations, the dollar will continue to strengthen. The Fed has a good reason to be pro-active rather than passive. The ECB has good reason to be passive rather than pro-active.
Today's economic index confirmed the Japanese economy is in a solid recovery. That's yen supportive.
Traders have jumped on the headline and people have shouted out China is going to make the currency convertible. China is not going to make the currency convertible; they are going to allow domestic investors to invest in foreign markets.
We see this as something that will increasingly weigh on the New Zealand dollar as we move through 2006. Fresh demand will be very limited.
It's pretty quiet out there and the ranges are likely to hold.
I think the market has had a free swing at selling the (US) dollar and has shown to ignore a pretty good sell-off in the bond market.
Machinery orders are important and the better-than-expected numbers will be yen-supportive.
Liquidity has generally gone from the market. I don't think traders would be particularly aggressive and strap additional risk on.
I'd be surprised if the BOJ raises rates at all this year and that is something that will tend to see the yen underperforming.
