14th October – Daily Currency Market Report

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The Market in Brief:

  • AUD losses recent gains
  • NZD lower
  • GBP deflationary worries
  • Gold $1,166

Market Events Due:

  • China inflation data
  • Westpac Consumer Sentiment
  • GBP employment data
  • US retails sales

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AUD/USD: The Australian dollar lost ground yesterday after a weak Chinese trade balance number showed a significant drop in the amount China is importing. As Australia’s most important trading partner and destination for much of the nation’s exports the AUD suffered accordingly and fell more than 1% throughout the session. The Fed signalling a rate hike is not appropriate for now prevented the AUD from falling further although with more Chinese data out during today’s session we could see AUD give up recent gains.

AUD/NZD: The Kiwi has also fallen from the recent highs amid concerns Chinese demand for imports is slowing. The China economic fears combined with Governor Wheelers comments this morning that further easing will be needed has ensured the Kiwi dollar has opened lower this morning.

AUD/GBP: The UK has fallen back into deflationary territory and levels not seen since the 1960s. The deflation issue has forced investors to put back any thoughts of an imminent rate hike from the BOE and subsequently forced Sterling lower.

AUD/EUR: A relatively quiet session for the Euro although German economic sentiment came out significantly lower than forecast which will be worrying for the region’s Economic growth prospects. Industrial production data expected this evening and forecast for yet another disappointing read for the Eurozone.

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 should the spot rate improve or the contract not be required. 

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Jim Devonport

Corporate & HNW Client Manager 

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