The market in brief:
- AUD trades in a tight range but closes at the highs
- NZD follows the trend
- NZ Business Confidence picks up
- German inflation higher
- US GDP lower but beats forecasts
- Chinese manufacturing improves
- China eases monetary policy over the weekend
- USD makes a record 8th straight month of gains
- Gold higher $1,213 & Crude Oil up 3% at 62.58
Market moving events for the next 24 hours:
- NZ Overseas Trade Index
- Chinese HSBC Manufacturing
- UK Manufacturing
- EU Inflation
- US Manufacturing
AUD-USD: The Australian Dollar was held in a tight 55 point range as we closed last week, but a pick-up in sentiment and commodities ensured the currency closed at the top of the day’s price action. The weekend’s developments saw the Chinese Governments manufacturing data improve and the PBoC eased monetary policy to give the economy a much needed boost. There is no data of note today and with tomorrows RBA meeting we can’t see too much movement happening until then. The markets consensus is for another interest rate cut tomorrow so importers with end of month bills still to pay should give us a call. Exporters get your target orders ready.
AUD-EUR: Another day and another day of gains for this pair, negating a better than expected German inflation print as Greek concerns and a generally stronger Aussie won the day. Eurozone inflation data is due this evening and the ECB meet on Thursday so those two events should knock this pair around as well. On the charts we are in over bought territory and have gapped higher at the open, so see the pair trending lower as we go through today’s session and perhaps on for at least the next few days.
AUD-GBP: Another volatile but ultimately flat day for this pair as although both were strengthening elsewhere, they were held in check by the improved US numbers. UK Manufacturing data comes this evening, Construction tomorrow, Services on Wednesday and the BoE meet on Thursday. The latter isn’t expected to cause any concerns, however the various sectors that report over the next 72 hours will. Technically we are hugging the bottom of the downward channel that has largely been in play since mid2013, so theoretically should expect a pick up here….but we’re not too sure. The week ahead will give us a much clearer picture.
AUD-NZD: A pick up in NZ business Confidence gave the Tasman Cross a nudge lower and despite a mid-session Aussie recovery, the pair closed at the lows. Focus for the Kiwi will be the Dairy Auction prices on Wednesday evening, that have a solid run of late, so possibly due for a weaker number. We have no choice but to favour further upside, whilst the previous record lows hold.
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