18th November – Daily Currency Market Report

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The Market in Brief:

      • AUD still holds downward channel
      • RBA Minutes a non-event
      • NZ Inflation Expectations up
      • UK inflation negative again
      • German ZEW Economic Sentiment up
      • US Inflation up
      • NZ Dairy prices down
      • Gold $1,069 & DJIA 17,497

Market Events Due:

  • RBA Asst Gov Debelle speaks
  • US Building Permits
  • US Fed’s FOMC minutes

 

 

 

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AUD/USD: A rebound in commodities and equity markets helped steady the Aussie, however it was well contained within the downward channel.  Tonight’s release of minutes from the FOMC meet will be key and as they are expected to confirm a rate hike next month the risk is to the downside for this pair.

AUD/NZD: A 3rd straight read of negative dairy prices has the cross pushing up to a 6 week high. There is no further NZ data set to come this week so we expect price action to hold these levels if not push higher.   

AUD/GBP: Inflation held at 1960 lows for the second straight month, resulting in modest gains for this pair. A 10 year bond auction is due this evening and will be of passing interest, but tomorrows Retail Sales are our focus for the rest of the week.  Technical resistance now sits 50 points above.   

AUD/EUR: A solid read in the German ZEW Economic Sentiment Survey helped alleviate some of the downward pressure on the common currency. Nonetheless we open at highs not seen since mid-August and one would expect the upward trend to continue. There is no further fundamentals due until ECB President Draghi speaks on Friday night and he is expected to continue to pave the way for further stimulus.

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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