28th February 2017 – Weekly Currency Market Report.



The Market in Brief:

                                                        • AUD flat V USD and NZD, up V EUR and CHF, down V GBP and JPY.
                                                        • AUD hits multi year highs V EUR and CHF.
                                                        • RBA minutes say near term outlook is optimistic
                                                        • AUD Private Capital Expenditure -2.1% V expected -0.4%
                                                        • GBP data slightly above expectations

Market Events Due:

                                                    • USD Core Durable Goods m/m (Tue) Prelim GDP q/q + CB Consumer Confidence (Wed) ISM Mnufact PMI (Thur) Fed Chair Yellen speaks (Sat)
                                                    • AUD GDP expected +0.7% (Wed) 
                                                    • GBP Manufacturing PMI (Wed) Construction PMI (Thur) Services PMI (Fri)
                                                    • CNY Caixin Manuf. (expected +50.9 )

REFERRALS: Client referrals are a very important part of our business. If you know of any contacts that could benefit from our comprehensive range of international currency transfer services, please do let me know. 

AUD/USD: Closed the week flat after hitting a fresh 3 month high on Thursday. So far it has rallied just over 8% in 9 weeks from its lows at the end of December. Similar to the previous week it is off 1% from those highs but managed to get within 35 points of the high on November 8 when Trump was elected. On the charts these levels have proved strong resistance since this support level was broken back in June 2015. That support level had held back to January 2015 so it is a big line in the sand. Positive comments from the RBA, suggesting they are done with interest rate cuts based on current data, gave the AUD a leg up. However the poor Capex numbers saw the AUD run out of steam and reverse the gains.

AUD/EUR: AUD hit a fresh 44 month high on Wednesday before correcting to close the week up 0.4%. AUDEUR has rallied just over 7% in 9 weeks from its lows at the end of December. It is off almost 1% from those highs on Wednesday night. On the charts these levels of resistance have held in place since July 2013.

AUD/GBP: Closed the down 0.4% and once again shy of its recent high 5 weeks ago and 2.5% shy of its 40 month high back in October. U.K Second Estimate GDP q/q came in at 0.7% V expected 0.6% keeping the majority of recent data above expectations. We have seen a 3% range over the last 5 weeks with the lows moving higher but still unable to break the upside. Importers can target 100 points higher with exporters looking at 150 points lower. 

AUD/NZD: AUD posted a fresh 4 month high against the NZD on Wednesday but closed the week flat as it did the week before. Once again on the charts these levels have held since July last year. The AUD rally has been quite significant given it has rallied 4% in 4 weeks. Importers can target last Wednesday’s 4 month high 100 points above.

AUD/JPY: AUD closed lower for the second consecutive week after posting a fresh 14 month high against the JPY 2 weeks ago.This was a welcome reprieve for exporters and those looking to buy AUD. It is almost back to the middle of the range that we have seen over the last 3 months. The US Fed’s reluctance to signal a March interest rate hike has triggered the recent Yen strength. Similar to last week we would expect a bounce short term given the solid sell off.

AUD/CHF: AUD posted a fresh 2 year high against the CHF on Wednesday before dropping 1% but it still managed to close the week up 0.5%. The CHF is still tracking very closely to the EUR which is under pressure across the board. On the charts it is still a very good opportunity for importers.

Compass Global Markets Team.



Leave a Reply

Your email address will not be published.