20th November – Daily Currency Market Report

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The Market in Brief:

          • AUD breaks higher
          • NZ Producer prices up
          • UK Retail Sales down
          • US Philly Fed Manufacturing up
          • US Weekly Unemployment Claim down
          • Gold $1,082 & DJIA 17,741

 

Market Events Due:

      • ECB President Draghi speaks

 

 

 

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AUD/USD: A 5 ½ week downtrend was surprisingly broken as the Chinese Central Bank cut borrowing costs from 4.5% to 2.75% in another attempt to stimulate their faltering economy. That, continued fallout from the less than hawkish FOMC minutes and “stops” being triggered on the break saw a near 1c move higher. There is no major data due today and with a heat wave expected on the east coast we’d expect a session of consolidation.

AUD/NZD: This pair actually traded sideways as the PBoC news was negated by a much better than forecast Producer Prices number. With no data due today we should hold the range until next week.

AUD/GBP: Pushed to 2 week highs on the Chinese developments and as UK Retail Sales data disappointed with a print of -0.6% versus last month’s +1.7% read. With no further data due we cannot see too much room to the upside today, but in fact sideways if not lower price action.

AUD/EUR: Is now 125 points higher over the week as the market is pricing in more and more monetary stimulus and of course the geopolitical tension. ECB President Draghi speaks this evening and could well spark another run higher. Should the A$ tread water or edge higher there may be no reason why we cannot head to €0.70c and above.

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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