6th August – Daily Currency Market Report

The market in brief:

  • AUD sideways
  • NZD lower still
  • NZ Unemployment up
  • UK Services down
  • US ADP jobs down
  • US Trade Deficit widens
  • Gold at $1,085 & DJIA 17,535

Market moving events due:

  •   Australian Unemployment
  •   UK Manufacturing
  •   Bk of England policy meet
  •   US Weekly Unemployment Claims

AUDUSD: The Australian Dollar has given up 1% of the recent rally as Fed member Lockhart’s comments of a US rate hike in September weigh on the currency, despite some uninspiring data from the US overnight. Today’s domestic unemployment data will be of interest and potentially a short term market mover, however we are really waiting for the RBA’s statement tomorrow and US Non-Farm payrolls that evening. On the charts and we have returned to our forecast support levels, that were resistance over the last couple of weeks. A break and we’ll target the other side of that channel, whereas a bounce will need to take out Tuesdays highs for further upside. All will be clearer come Monday.

AUDEUR: Another day of no major economic data from Europe meant focus was on secondary data and a pick up in the Services sector meant a drift lower for this pair as well. The picture remains the same today and so we’ll expect the prior resistance, now support, to hold – unless the domestic unemployment number is a shocker – for a gradual grind higher.

AUDGBP: The Pound recovered some of its losses, despite a drop in the Services sector number, as the market awaits this evenings BoE meet. There is no change to policy expected, however the market likes to play safe just in case. UK Manufacturing data comes out just before that so we may see a delayed reaction later on. As mentioned yesterday “orders either side the way to play this week”.

AUDNZD: The Tasman Cross has held up at the highs and actually pushed on slightly. Yesterday’s early morning NZ numbers saw a fall in dairy and a rise in unemployment, giving the market no reason to believe that the RBNZ are to move from their easing policy. Medium target set at 1.20+

Quote of the day: Opportunities are like sunrises. If you wait too long you miss them. William Arthur Ward 

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 if the rate improves or if not required.

Jim Devonport

Corporate & HNW Client Manager


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