24th November – Daily Currency Market Report

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The Market in Brief:

              • AUD retraces
              • French manufacturing up
              • German manufacturing up
              • Gold $1,068 & DJIA 17,794
          •  

Market Events Due:

          • German Ifo Business Climate Survey
          • RBA Governor Stevens speaks
          • UK Inflation Report Hearings
          • US GDP

 

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AUD/USD: The Japanese holiday and a pullback in commodities and equity markets alike ensured the A$ did the same. The local currency opens 1% below Friday’s highs and with RBA Governor Stevens speaking this evening and US GDP figures following that, today’s price action should hold within the recent range. Interestingly the US Dollar Index has just recorded a 12 year high hitting 100.39 overnight, suggesting a correction and weaker US$ may be on the cards.

AUD/NZD: As forecast in yesterday’s report, the cross is well supported and opens at the same level as yesterday. Thursdays NZ Trade Balance numbers are the only focus so unless the RBA’s Stevens says something untoward we should hold here if not push higher.

AUD/GBP: Our favoured short term correction played out yesterday as GBP buyers jumped on board and technical resistance held firm. Inflation Report hearings are due this evening and will be of interest given the recent batch of negative inflation prints from the UK. We’d need to see some very dovish statements from the hearing to break the 5 month trend line so see recent highs capping for now.

AUD/EUR: The higher levels were sold into here as well, meaning our suggested short term correction also came about for this pair. The move was continued with the help of better than expected Manufacturing numbers and the positivity should continue with an upbeat German Ifo Business Climate Survey this evening. Nonetheless, sentiment is very much against the Euro at the moment and our view favours the trend continuing medium term with more upside and a target of the June highs 170 points 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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