The market in brief:
· AUD largely unchanged
· NZD off day’s highs
· RBA Minutes call for weaker AUD
· EU court gives OK to QE
· UK inflation back in black
· German Economic Sentiment down
· US Building Permits up
· NZ Dairy Price
· Gold to $1,182 & DJIA at 17,920
Market moving events due:
· NZ Current Account
· UK Average Earnings
· UK Unemployment Claims
· BoE votes
· BoE Governor Carney Speaks
· US Federal Reserve’s FOMC meet
AUDUSD: The Australian Dollar is little changed despite an important Asian session. The RBA minutes were released and in it they once again called for a weaker currency and basically gave a dour outlook for the near term. However the market has heard that all before and although we saw a shallow dip the pair was picked up again on mixed US data. All eyes are on tonight’s US Federal Reserve meeting and any confirmation of our thoughts to a September tightening of interest rates. On the charts resistance appears to be firming at these levels, so we’ll need some dovish Fed speak to help us break through and reach our initial target 120 points above. Support sits at previous lows 150 points below and as we always mention with such potentially market moving data – placing orders is the way to go.
AUDEUR: The common currency is becoming increasingly volatile as we edge closer and closer to some form of resolution to the Greek debt impasse. German PM Merkel says she is doing all she can, however other EU members have reverted to insults with comments that the Greeks are “amateurs” and are “misleading voters”. News has come that the EU ministers have now called a meeting for Friday and again suggest a deal can be struck over the weekend. Don’t hold your breath. We should however hold the range until a decision is made, so we suggest preparing orders early so as to take advantage of a potential break.
AUDGBP: As pre-warned in yesterday’s report the UK’s inflation print was keenly awaited and when it showed a recovery the Pound pulled away to hit fresh 6 years lows. The day ahead is full with UK data again and as all is suggesting a rosier picture in the sceptred isle we favour a continued move lower for this pair, with the odd correction for importers to jump on. We remain firmly in the downward channel and could well hit our 44p target as early as the latter part of next month.
AUDNZD: Another negative print in the NZ Dairy price overnight has kept the weight firmly on the NZ Dollar and sees the Kiwi losing more ground on the Tasman Cross. NZ GDP data comes tomorrow morning, which is expected to show a slowdown, so with the FOMC meet due just a few hours before then we cannot see too much movement for this pair over the next 20+ hours, but then a continuation of the uptrend towards our 1.20 target.
Quote of the day: My only fault is that I don’t realise how great I really am. Muhammed Ali