30th October – Daily Currency Market Report

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The Market in Brief:

  • AUD hugs support
  • NZD flat
  • Australian Import Prices disappoint
  • German Inflation flat
  • German Unemployment down
  • Spanish Inflation down
  • US GDP weaker
  • Gold $1,145 & DJIA 17,777

Market Events Due:

  • NZ Business Confidence
  • BoJ meet
  • EU Inflation
  • EU Unemployment
  • Chinese Manufacturing (Sunday)

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AUDUSD: Opens at a 3 week low and hugging the bottom of the downward channel as the market is starting to expect an interest rate cut on cup day. US data was mixed overnight, but a pickup in employment outweighed a drop in their GDP. There is no data of note due until next week, so we’ll continue to hold around for today. On the charts we have targets set for next week 130 points above and below the current levels, dependent on the RBA.

AUDEUR: Opens at 1 week lows once again as the common currency recovered recent losses and figures out of Germany weren’t too bad. There is no data from the EU until next Wednesday’s speech by ECB President Draghi, so direction will be determined locally and should mean we’ll hold the range until Tuesday.

AUDGBP: Has broken the short term upward channel, as forecast, and now appears set to continue on its way lower. An HSBC report that the BoE should hike interest rates ahead of the US, based on the UK employment situation, was all it took for the market to push for a bounce in an oversold Pound. It’s a big week for UK data next week and will give us a much clearer picture on the current state of the economy. We’ll stick with our forecast of £0.40pence.

AUDNZD: Despite the RBNZ threatening to cut interest rates as soon as their next meeting the market is happy to jump on the higher rates of interest still on offer. We have however held support levels and so should continue to do so until 2.30pm (Syd) next Tuesday at least.

QUOTE OF THE DAY: If women ran the world we wouldn’t have wars, just intense negotiations every 28 days. Robin Williams

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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