29th July – Daily Currency Market Report

The market in brief:

  • AUD rebounds
  • NZD pushes up
  • China Govt to buy equities
  • UK GDP up as expected
  • US Consumer Confidence drops sharply
  • RBNZ Gov Wheeler sees lower NZD
  • Gold at $1,095 & DJIA 17,625

Market moving events due:

  •   EU Consumer Sentiment
  •   UK Net Lending
  •   US Pending Home Sales
  •   US FOMC meet

AUDUSD: The Australian Dollar has rebounded 100+ points as the Chinese Government confirmed that it would continue to buy domestic stocks, in an attempt to calm the volatility there, whilst US Consumer Sentiment dropped and the prior month’s number was adjusted lower. We now turn our attentions to tonight’s FOMC meeting and any confirmation that US interest rates are to be tightened come September. Signs of a delay to that consensus of opinion and the Aussie should continue on its way, however for today we see these levels being sold into as importers take advantage and as we hit technical resistance that acted as support on the way down.

AUDEUR: The Australian Dollar has made a solid recovery here as well, bouncing off our forecast support lows to correct all of Monday’s losses. EU Consumer Confidence is due this evening, but shouldn’t overly effect price action. Looking at the charts and it appears these highs may be it for importers and we should trade sideways if not lower again over the next 24 hours.

AUDGBP:  A similar pattern here as with the Euro, the Aussie reclaiming Mondays lost ground, despite another solid UK economic data read. There are a couple of second tier UK data releases this evening, however markets are in a holding pattern ahead of the US session. We see this pair trading sideways if not lower today, but giving importers a chance to take advantage.

AUDNZD: The Tasman Cross continued to defy logic, hence its moniker of “the widow maker” in trading circles. The pair has drifted lower still and had one sharp move as a result of a less dovish than expected speech by RBNZ Governor Wheeler, who said that he sees one more rate cut but that has been factored in to the currency. He went on to say he sees the NZD lower, but that part fell on deaf ears. There is no NZ data released until Friday so one should expect a recovery….

Quote of the day: A good decision is based on knowledge and not on numbers. Plato

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.

 

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