10th July – Daily Currency Market Report.

AUDUSD: The Australian Dollar was buoyed by a series of better than expected local employment figures, a recovery of sorts in the Chinese stock market, better Chinese inflation and as the new Greek Fin Min submitted their latest reform plans (see below). The result was a continued move away from Wednesdays 6 year lows. There is no economic data set to come today so we should meander around these levels, until US Fed Chairwoman Yellen’s speech this evening. Technically a close above resistance 100 points above is needed to ensure the down trend has passed, short to medium term. 

AUDEUR: This pair has rallied as the good news affecting the Australian Dollar was in contrast to the Greek Finance Minister submitting his latest / last reform proposals. The growing possibility of the Greek nation staying within the Euro is being viewed as a negative given their foreseen continued struggles to make ends meet and high chances of another default issue down the road. Policy makers meet again today and have set Sunday as a deadline, which suggests Monday’s price action will be just as volatile as the Monday just gone. We’ll repeat our message for a final time for those yet to take action: Anyone with Euro currency exposure should have a plan in place to both 1) protect against adverse movement and 2) take advantage of any favourable pricing. 

AUDGBP: The Bank of England kept interest rates on hold along with the amount of quantitative easing, as widely expected. However Governor Carney did mention the growing risks associated with the Greek debt situation. Despite the Governments Chancellor of the Exchequer suggesting the fastest growth rates in Europe, the UK Trade Balance numbers are released this evening and expected to show a widening deficit so suggests that this pair may close the week at these relative highs. We therefore suggest that importers take advantage of this correction as the downtrend is still very much in place. 

AUDNZD: The Tasman Cross bounced off the lows, as forecast in yesterday’s report, due to the employment numbers in Australia surprisingly improving and the as the situation in China picked up. The move was nonetheless shallow and was mostly eroded during the New York session, but we feel does suggest the future direction. Technically the support area tested earlier in the week should hold as we head into the weekend and potentially onwards given we have the NZ Dairy Price announcement and NZ inflation prints in the middle of next week and both are expected to disappoint.