23rd April 2015 – Daily Currency Market Report.

The market in brief:

  • AUD edges higher
  • NZD flat
  • Australian Inflation beats expectations
  • Bk of England vote is unanimous
  • US Existing Home Sales at 18 month high
  • Gold down at $1189 & Brent Crude at $62.50

Market moving events due:

  • Australian Business Confidence

     

  • Chinese Manufacturing
  • French Manufacturing
  • German Manufacturing
  • UK Retail Sales
  • US Weekly Unemployment Claims

AUD-USD: The Australian Dollar rallied as inflation for the last quarter increased +0.2%, better than the expected +0.1%, seeing a solid 100 point rally. The chances of a rate cut from the RBA next month are now just 32%. However the pair then gave up half of those gains on healthy US data and corporate earnings, (Facebook made $650 million and eBay made $802 million in Q1’15). Today’s focus centres on Chinese Manufacturing and expectations are of a 3rd straight month of contraction. That should keep the local currency firmly in the recent range and as per yesterday’s report that may be the case for the rest of the week.   

AUD-EUR:This pair pushed back to Monday’s highs on the back of healthier domestic inflation, although the move was not as strong as it might have been due to the market expecting some form of compromise on the Greek situation at tomorrow’s talks. Manufacturing info out of Europe’s two major economies comes this evening and expected to show improvements so  that and the aforementioned discussions should ensure the top side holds firm for the next two trading sessions. Importers with bills to pay should give us a call. 

AUD-GBPNews that the Bank of England policy makers all voted to keep rates on hold was unsurprising however their minutes suggested an interest rate hike is on the cards, although perhaps not until next year. Nonetheless this was all the market needed to break our pennant formation, as forecast yesterday, erasing all of the Aussies inflation sparked gains. UK Retail Sales are up this evening and expected to show a slow down there. Technically resistance on any retracement is now where the bottom of the pennant broke, sitting 30 points above.  

AUD-NZD: The Tasman Cross is virtually the only pair where the Asian sessions gains were held, seeing us 80 points higher over the last 24 hours. RBNZ Assistant Gov McDermott speaks on inflation this afternoon, which should be a precursor to next week’s RBNZ meet. On the charts we move further away from parity and target a move back to the April highs 90 points above.  

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Quote of the day: If you want to see the sunshine, you have to weather the storm. Frank Lane

 

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