31st August – Daily Currency Market Report

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The Market in Brief:

  • AUD opens lower
  • GBP falls over weekend
  • Stronger NZ Building permits
  • Weaker data out of the US
  • Gold $1131

Market Events Due

  • RBA rate statement
  • Australian GDP and retail sales data
  • NZ Business Confidence

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AUDUSD: After a volatile start to last week which saw AUD trade in a 3 cent range against the Greenback the week finished much calmer lead by a recovery in the Chinese stock market. Friday saw weaker than expected personal spending and consumer sentiment data out of the Sates although this did little to devalue the USD as the market still expects that the Fed will hike rates in Sept for the first time in 9 years. The domestic calendar is very quiet today although picks up throughout the week with RBA rate statement tomorrow , GDP data on Wednesday and retail sales data on Thursday. The domestic data combined with US employment data this week could cause yet another week of heightened volatility so it may be wise to speak to us about locking in a rate for your short term exposures.

AUDNZD: The NZD opened the week almost exactly where it did on Friday and with July building permits data this morning showing the biggest increase since 2005 it is a good start to the week for the Kiwi. All eyes will now turn to the lunchtime Business confidence data to dictate the short term direction of the NZD.

AUDGBP: The UK highlighted yet again that the recovery was firmly on track with data showing the economy had expanded 0.7 percent for the second quarter of the year. Unfortunately this was not enough for many investors and Sterling lost ground to the Greenback as expectation grows that the Fed will raise rates before Carney at the BOE. Sterling opens lower again against the Aussie this morning as Carneys comments that UK has modest exposure to China and will look through temporary stagnant inflation data appear to have been overlooked by the market.

AUDEUR: As the Greek crisis seems to have settled and is no longer the major concern for the market the EUR has held relatively stable in recent days and very little change for this pair . A busy week of economic data ahead for the Eurozone with CPI manufacturing out tonight followed later in the week by German manufacturing and unemployment as well as Euro GDP data to conclude the week. 

 

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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