1st April 2015 – Daily Currency Market Report.

The market in brief:

  • AUD lower still
  • NZD also pulled down but not as much
  • NZ Business Confidence beats expectations
  • UK Current Account fails to match forecasts
  • EU inflation falls for 4th month
  • EU Unemployment increases
  • US Consumer Confidence rallies
  • Gold lower at $1,183 & Brent Crude at $55

Market moving events for the next 24 hours:

  • Australian Building Approvals
  • Chinese Manufacturing
  • UK Manufacturing
  • US Manufacturing
  • US ADP Non-Farm Employment Change
  • NZ Global Dairy Trade Price

AUD-USD: The Australian Dollar lost out to a continued bout of US Dollar strength, for the 6th straight session. A lack of any supporting data this side of the world didn’t help, whilst a positive US Consumer Confidence number and the market positioning themselves ahead of Fridays all important Non-Farm Payrolls ensured the selloff. Our focus will be on Chinese Manufacturing today, but is not expected to move the market in any sizeable fashion although may halt the slide for now. This evenings ADP report carries the greater weight, but again shouldn’t overly move the market as we wait for Friday. On the charts we sit at the lower end of the 2+ month range and expect that to hold for now. Exporters should be looking at their USD account balances.

AUD-EUR: The Euro weakened again as German PM Merkel and her French counterpart Hollande pressed the Greek government to come up with some form of feasible economic reform package. Another negative print in Eurozone inflation and more unemployed also contributed to the move higher. There is no data expected today so we’ll wait to see what the Greeks have to say. Technically the medium term picture suggests we are stuck in a downward channel and we target another 1% sell off.

AUD-GBP: A slightly healthier Current Account number, coupled with an uptick in GDP saw the Pound gain here. Yesterday also marked the start of canvassing for the UK election, which apparently is one of the closest races to be run in years. The political uncertainty may therefore slow any economic related gains. On that note Manufacturing numbers are due this evening and from a technical standpoint we will look for a continued push back into the medium term downward channel.

AUD-NZD: The Tasman Cross came within just a few points of Mondays push to fresh all-time lows. A solid print in NZ Business Confidence confirming that NZ is at the polar opposite of its economic cycle than Australia. Whether that’s enough to push the pair through parity we shall see, but what is clear from this price action is that should that move come it will be shallow and short lived. NZ Dairy price numbers are out overnight and as mentioned on Monday with a recent range of +10.1% to -8.8% expect the unexpected and take advantage of a volatile session. Place orders, whatever side of the market you are on.

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