Week ending 12 June 2009: The forex trading week focused on increasing risk acceptance possibly beyond economic fundamentals, with many majors consolidating and commodity currencies gaining. Traders are encouraged to read Westpac’s weekly analysis for insights into global investors’ mindsets.

Australia lost 26.2K fulltime positions and gained 24.5K part-time ones in May, for a total loss of −1.7K jobs and an unemployment rate of 5.7%. May NAB survey printed −14 business conditions but a sharp gain to −2 in business confidence, while job advertisements fell −0.2% m/m. June Westpac consumer confidence surged to −12.7% and consumer inflation expectations to 2.8%. AUD/USD could not hold gains beyond 0.8200 nor reach last week’s high of 0.8262, closing at 0.8131 for a weekly gain of 2.4%.

U.S. May advance retail sales printed 0.5% m/m, 0.5% ex-autos, and flat ex-autos, building materials, and petrol stations. The April trade balance widened to a deficit of US$29.2Bn.

The Eurozone June Sentix investor confidence rose to −27.0 from −34.3 although April industrial production fell −1.9% m/m, −21.6% y/y. EUR/USD traded flat within a tightening range of 1.4135 and 1.3920 for much of the light data week, closing at 1.3998.

The U.K. May NIESR GDP estimate improved to −0.9% m/m from −1.5% previous. April DCLG house prices rose to −13.0% y/y and the May RICS house price balance to −44.1%. April industrial production improved to 0.3% m/m, −12.3% y/y, manufacturing production 0.2% m/m, −12.7% y/y. The April visible trade balance deficit widened to £7003Bn, the total trade balance to £3014Bn. GBP/USD regained last week’s losses but could not push beyond strong resistance at 1.6600, closing at 1.6427, while EUR/GBP trended strongly down to close at 0.8518.

Canada’s April international merchandise trade fell CA$0.2Bn. April new housing price index fell −0.6% m/m and May housing starts rose 128.4K. USD/CAD also consolidated within a range of 1.1260 and 1.0940, closing at 1.1176. AUD/CAD slammed through resistance at 0.8920 for a weekly gain of 2.1%, closing at 0.9088.

The RBNZ left rates unchanged at 2.5% and emphasized continued downside risks while acknowledging possible stabilisation. April retail sales rose 0.5% m/m but fell −0.1% ex-autos. 1Q2009 terms of trade index fell −3.0% q/q and May manufacturing PMI fell to 42.7 from 43.7, while May REINZ house sales rose 43.9% y/y and house prices fell −8.1%. NZD/USD was capped by resistance at 0.6460, closing at 0.6424, while AUD/NZD traded flat for the week, closing at 1.2648.

The BoJ meets Monday, 15 June, and is expected to maintain steady rates at 0.10%. The 1Q2009 GDP was revised up to −3.8 q/q, −14.2 annualised, and the April leading index rose to 76.5. May consumer confidence improved to 36.3 from 33.2, the EcoWatchers survey to 36.7 current, 43.3 outlook. The April current account printed a surplus of ¥630.5Bn, the trade balance ¥184.3Bn. May machine tool orders improved to −79.3% y/y, April industrial production to −30.7% on a 5.9% m/m surge, while April machine orders sank to −32.8%. USD/JPY consolidated within a rising wedge, capped by resistance at 98.60, closing at 98.36. EUR/JPY could not force through last week’s high and closed at 137.70, while AUD/JPY continued its uptrend beyond resistance at 79.60 and closed at 79.99.