15th June – Daily Currency Market Report.

The market in brief:

  • AUD off highs
  • NZD lower
  • NZ Business Manufacturing down
  • US producer Prices up
  • US Consumer Sentiment up
  • Greek talks break down
  • Gold at $1,181 & DJIA 17,900

Market moving events due:

  • RBA Assistant Gove speaks
  • ECB President Draghi speaks

AUDUSD: The Australian Dollar understandably edged off its recent highs, as we headed into the weekend and as US economic data beat expectations, but still managed to claim its first week in four. Nonetheless it’s interesting to note that  although a couple of months away, thoughts are growing that the US Federal Reserve is to look at a possible August or September interest rate hike, given the increasingly healthy picture. In the meantime the week ahead sees minutes released from the latest RBA meeting and the US Fed meet very early Thursday morning. Technically the lows continue to hold and we expect that to continue being the case, unless the Fed suddenly goes. Resistance is the 50% retracement of the selloff seen since mid-May that sits 125 points above.

AUDEUR: Friday saw the Euro claw back some of the losses sustained earlier on in the week as the powers that be headed into the weekends Greek debt talks. Unfortunately the only developments have been a withdrawal by the IMF and the Germans “losing patience”. The group meet again on Thursday in what is widely regarded as the last chance to keep Greece European. On to the charts then and we have gapped higher at the open and should sentiment remain as it is suggests a decent target to set by weeks end sits 200 points above.

AUDGBP: The Pound bucked the trend and instead of giving up earlier gains, it added to them as we appear to have comfortably passed the psychological 50pence (2.00) barrier. UK Inflation is our main focus this week as we look to see if the UK is set to continue in this deflationary period. A positive number should see sterling rocket higher. Our short to medium term target is 145 points below as we appear headed to the ultimate target of 44 pence.

AUDNZD: The Tasman cross has settled down into a more normal 60 point range, following the RBNZ’s decision to cut interest rates.  Kiwi data centres on dairy prices and GDP data, that are both expected to print lower and therefore maintain the upward momentum. We may well have a few dips for AUD buyers with NZD to target, (the RBA minutes for example), but the trend remains firmly up.

Quote of the day: Intelligence is the ability to adapt to change. Stephen Hawkins

Alternative Currency Hedging: Ask us about a great alternative to traditional forward contracts that give the ability to cover at attractive levels, but with the flexibility to walk away if the rate improves or if not required.

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