4th March 2015 – Daily Currency Market Report.

The market in brief:

  • AUD bounces to the top of the range
  • NZD gets pulled higher as well
  • RBA keep interest rates on hold
  • Australian Building Approvals beat all expectations
  • Spanish Unemployment numbers fall
  • UK Construction better than forecast
  • NZ Global Dairy Trade price only slightly higher
  • Gold at $1,205 & Crude Oil up 1.3%

Market moving events for the next 24 hours:

  • Australian GDP
  • Fed Chairwoman Yellen speaks
  • UK Services
  • US ADP Non-Farm Employment Change
  • Bank of Canada rate statement
  • US Non-Manufacturing

AUD-USD: The Australian Dollar rallied to the top of the recent range upon release of much better than expected building numbers and then as the Reserve Bank of Australia held interest rates at 2.25%, which surprised at least half of the market. There was no US data released of note so the rally was held and we open at the highs. However we have several more pieces of data to come of the next couple of days, starting with GDP data this morning and the US ADP Non-Farm Employment numbers this evening. On the charts we are hemmed in by previous highs but maybe have another 75 points of upside for importers to target. Exporters can target the bottom of the trend line support that sits 130 points below.

AUD-EUR: The Euro gave up Monday’s gains as the RBA kept interest rates on hold and as there was nothing of major significance released from Europe, although Spain released its best February unemployment figures since 2001. In fact there is nothing of note due until tomorrows ECB meeting, so direction will be dictated by local events. On the charts we are in an upward channel, but the indicators tell us the move is overbought and ripe for a reversal or at least a correction. Importers should be calling now.

AUD-GBP: A similar pattern here as gains made with the RBA’s decision not to change interest rates saw the currency rally and hold up at these higher levels. The move was slightly tempered by better than expected UK Construction numbers, but the small pull back was soon reversed. UK Services sector data is due this evening and the market is looking for another strong number. On the charts we are trading sideways in the short term, having touched the bottom of the longer term downward channel. There is plenty of room in either direction and we may not have a clearer picture until next week, so with so much volatility set to come orders are the way forward.

AUD-NZD: The Tasman Cross was pushed higher on the back of the RBA’s inaction, however another increase in dairy prices has seen half of this pairs gains eroded. There is nothing of note from NZ for the rest of this week, so direction will come from Australian data over the next few days and with most of that expected to be better than last months, we can’t see too much further downside here.

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