7th July – Daily Currency Market Report.

The market in brief:

  • AUD trades along the bottom
  • NZD closes flat
  • Australian Inflation Gauge down       
  • Australian Job Adverts up
  • German Factory Orders down
  • US Manufacturing up
  • Markets in limbo awaiting Greek in/out
  • Gold at $1,169 & DJIA 17,721

Market moving events due:

  • RBA meet
  • UK Manufacturing
  • EU Meetings
  • US Trade Balance


AUDUSD: The market has closed the sudden downward gap that was seen upon yesterday’s open and the pair traded a tight 70 point range. A mixed bag of second tier domestic data releases were completely ignored as was an improved US Manufacturing print but which was below expectations. Price action and the opportunity that brings with it, (when orders are placed to take advantage of short lived reactionary spikes), is set to increase as we have the RBA’s interest rate decision as the first of many events this week. No-one is really expecting a cut and with the currency at the central banks favoured levels it will be interesting to see what they say. US Trade Balance numbers come this evening, however we have the EU meet to negotiate before that, (see below). On the charts these lows should hold with a target of last week’s levels on the upside. A break and we can easily be USD 2 cents lower quick smart. 

AUDEUR: As with the USD, the Australian Dollar has closed the downward gap that a nervous and unsure antipodean market created at yesterday’s open. German Factory Orders sunk, however this meant just a small blip higher as focus was on the Greek debt situation. Surprisingly the Finance Minister resigned, or perhaps was pushed, and this was seen as a positive due to the fact he’d been a bit of a road block in most negotiations.  The Eurogroup meet again this evening and 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. Technically the larger picture remains in place, however that should change with a hoped for imminent resolution.

AUDGBP: This pair has understandably bounced around in a tight range as the market digests what’s going on in Southern Europe, prepares for perhaps a policy defining meeting from the RBA this afternoon and ahead of an important week of UK data to come. That’s starts with Manufacturing numbers this evening and with a positive number expected we could see the start of another leg lower for this pair. On the charts we touched a fresh 6 year low and the technical indicators suggest there is further downside to come, before any natural short term and shallow correction in the longer move. 

AUDNZD: The Tasman Cross is at firm support of the levels traded in late June. There was no major NZ data released yesterday and in fact this morning’s NZIER Business Confidence number is the only main event on the Kiwi calendar. That number has come out at +5, versus a prior +23 and seen the pair tick higher. On the charts then and we’d suggest these levels will hold for further upside, especially should the RBA be neutral or even less dovish as has been the case recently. We continue to suggest that AUD buyers with NZD receipts look at these levels for upcoming exposure. Our favoured move is still higher with a target NZD 7 cents away and likely to be hit Q3’15.

Quote of the day: Coming together is a beginning; keeping together is progress; working together is success. Henry Ford


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