11th June – Daily Currency Market Report.

The market in brief:  

  • AUD edges higher
  • NZD sinks
  • RBA Governor makes dovish speech
  • UK Manufacturing drops
  • BoJ Governor calls an end to Yen weakness
  • BNZ cuts OCR
  • Gold at $1,186 & Brent Crude at $65.70

Market moving events for the next 24 hours:

  • Australian Unemployment
  • Chinese Industrial Production
  • US Retail Sales·    
  • US Weekly Unemployment Claims

AUDUSD: A very volatile and interesting day yesterday that centred around two opposing central bank governor views. RBA Gov Stevens, left the door open for further rate cuts if required, whereas BoJ Gov Kuroda called an end to the Japanese Yen weakness, therefore suggesting physical intervention. The result was a 150 point reversal of the earlier Aussie sell off and the local currency closes 60 odd points up on the day. Domestic unemployment numbers come today as does Chinese Industrial Production, both of which have the potential to move an already unsure market. On the charts we see previous lows continue to hold, so as good as it looks likely to get for exporters, whilst resistance sits at the previous June highs 80 points above.  
AUDEUR: The Euro strengthened to fresh 4 month lows on this cross, but those levels were understandably bought into by exporters looking to bring their receipts back. However the BoJ comments also gave support to surrounding Asian currencies and when reports surfaced that Germany had rejected the Greeks latest attempt at a compromise this pair pushed back into the week long range. The “Paperology”, continues so we shouldn’t see too much in the way of a move in either direction until we have some form of resolution.

AUDGBP: TA whippy session here as the Pound gained on the RBA’s suggestion of lower interest rates and a weaker currency, although with the Japanese calling a halt to USD strength and a drop in the UK Manufacturing numbers this pair pulled back. There is no UK data of note due until next week’s inflation report, so short term direction will be determined locally. On the charts any rallies are set to be short lived and shallow as we hold firm in this downward channel.

AUDNZD: All go on the Tasman Cross as the RBNZ have cut interest rates to 3.25% and went further by suggesting further easing may be appropriate, "depending on emerging data". The fall in dairy prices and ring fencing of Auckland house prices has sparked the central bank into action that has resulted in this pair pushing NZD 2.5 cents higher. Our forecast upward move has therefore sparked back into life and we see another 2 cents of further upside until we get into medium term “fair value”.

Quote of the day: Nothing is work, unless you’d rather be doing something else. George Halas


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