17th February 2015 – Daily Currency Market Report.

The market in brief:

  • AUD trades a 40 point range and closes flat
  • NZD edges higher
  • NZ Retail Sales improves
  • Japanese GDP fails to beat economist’s expectations
  • EU meetings break up
  • US Holiday ensures quitter start to the week
  • Gold and Oil both flat

Market moving events for the next 24 hours:

  • RBA Monetary Policy Meeting Minutes
  • UK inflation
  • German ZEW Economic Sentiment
  • NZ Global Dairy Price

AUD-USD: The Australian dollar had a look higher, dragged up by better than expected economic data from across the ditch, however the highs were soon taken advantage of by importers and we drifted lower towards the close. The US holiday ensured the range was held, although this morning’s release of the minutes from the most recent monetary policy meeting will be of interest to gauge the timing of the next / if any interest rate cut. On the charts we’re still 100 points below medium term resistance and 150points above support.

AUD-EUR: The Euro has fallen away as Greek debt talks break down, although the Greek Finance Minister Varoufakis has overnight said Greece will stay in Europe and that there should be an agreement in the next two days. Tonight’s German ZEW Economic Sentiment Survey will still be important and as it is expected to show an improvement the Euro may claw back some of its overnight losses. As per yesterday’s report technically we still trade either side of the 50% retracement of the selloff seen since late September so a fair place to buy or sell the single currency. A break of that range will determine longer term direction, but that sits 3 cents either side so may take a while.

AUD-GBP: The Pound has also weakened as the market digests the uncertainty in Europe. Tonight’s inflation report will be key and is expected to be weaker and therefore putting added pressure on this recent weakness. As forecast in yesterday’s report the bottom of the downward channel acted as firm support and assisted this move higher. A decent target now sits 150 points above for importers.

AUD-JPY: : The Yen has strengthened as a safe haven play whilst the European issues are resolved and as GDP figures improved, although not as much as expected.

AUD-NZD: A healthy pickup in NZ Retail Sales saw the Tasman cross dip again yesterday. This evening’s dairy price release will be important and could well see us test further downside. Technically however the charts are well into over sold territory with the daily and weekly both showing signs of exhaustion and a possible reversal. AUD buyers with NZD receipt should really be looking at these levels to hedge at least a fair percentage longer term exposure.

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