12th September 2016 – Weekly Currency Market Report.



The Market in Brief:

                            • AUD down against the majors
                            • JPY the best performing currency of the week
                            • AUD GDP slightly lower than expected (0.5% V expected 0.6%) whilst trade balance better than expected (-2.41bn V expected -2.65bn)
                            • AUD RBA leaves rates on hold at 1.5% as expected

                            UK data mixed

Market Events Due:

                          • CNY Industrial Production (Tue)
                          • GBP CPI (Tue) Average Earnings Index (1/4) Claimant Count Change (Wed)  Official Bank Rate and Monetary Policy Statement (Thur)
                          • AUD Employment Change and Unemployment Rate (Thur)

                          USD Core Retail Sales, PMI, Philly Fed Manufacturing Index and Unemployment Claims (Thur) Core CPI and Prelim UoM Consumer Sent. (Fri)

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AUDUSD: Although the AUD only closed the week down 0.35%, it fell 2.5% over the last 2 days. The solid levels of resistance have now managed to hold for the last 4 1/2 months. The US Dollar strengthened on Friday night after comments from noted dove & FED voter Rosengren (Boston Fed President) in favour of higher US interest rates. The market is now pricing the chance of a September 22 US rate hike from 18% to 25%. The RBA left rates on hold last week as expected and the chances for an October rate sit at 7%.  Those looking to convert USD to AUD have their best opportunity in the last 10 days whilst importers can target the solid levels of resistance 200 points higher. 

AUDEUR: The AUD closed the week 1% lower against the EUR after being up 2% at one stage. It was still shy of the resistance levels that have held in place since last November. There is short term support at these levels but if it breaks the next level of support is 1% lower. AUDEUR is currently at a 10 week low.

AUDGBP: The AUD closed the week down a tiny 0.2% but was up almost 2% on Thursday. It was it’s 4th consecutive week down against the GBP. These support levels held 2 weeks ago but look set to be tested again.

AUDNZD: AUD posted its 5th consecutive week down against the NZD, closing 0.9% lower. It has traded a little lower than the support that held 2 months ago before AUD posted a 4.5% rally in 2 weeks. If support here breaks the next level is the March 2016 lows which are 200 points lower. 

AUDJPY: The AUD closed the week down 1.5% against the JPY which was the best performing currency of the week. Support sits 120 points lower and importers can target resistance 200 points higher.

AUDCHF: AUD closed the week down 0.75% against the CHF after rallying 2% earlier in the week. It was still 30 points short of long term resistance that has held in place for the last 18 months.

Compass Global Markets Team.



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