5th February 2015 – Daily Currency Market Report.

The market in brief:

  • AUD looks higher but then gets pushed lower in NYK
  • NZD does the same
  • NZ Unemployment increases
  • RBNZ Governor gives a fairly hawkish speech
  • UK services data improves
  • US ADP Non-Farm Payrolls drop
  • US Non-Manufacturing improves

Market moving events for the next 24 hours:

  • Australian Retail Sales
  • Bank of England meet
  • US Trade Balance
  • US Weekly Unemployment Claims

AUD-USD: The Australian Dollar had a look higher during the Asian session, on the back of the rally in commodities and thegeneral “risk appetite’, however a mixed bag of US data along with a falling oil price and apprehension on data due over the next two days ensured the currency was kept firmly in the range. This morning sees the release of domestic Retail Sales and this evening the US Trade Balance number. The more important RBA Monetary Policy Statement and US Non-Farm Payrolls that come tomorrow should ensure muted price action in the meantime, but with the potential for a short lived spike in either
direction – dependant on data.

AUD-EUR: The Australian Dollar has fared well here as concerns were raised again on Greece’s ability and overall enthusiasm to address their outstanding debt as has been previously agreed. There is no data due from the EU until next week, so focus will be on the political picture and domestic data. As forecast yesterday, our small recovery came to fruition and we see that continuing.

AUD-GBP: The Pound has benefited from a solid pick up in the Services sector, an ever growing part of the UK economic. This pair has therefore drifted down to the lows that capped the day before, although the move was curbed as the market was reluctant to take the Pound too far as we wait for the Bank of England meet this evening. No change in rates is expected, but we’ll look to their comments for thoughts on the economy’s future. Technically we continue to think these areas are oversold and should hold for a recovery.

AUD-JPY: The Japanese Yen has strengthened on the back of the retracement in crude oil and as the Australian Dollar was pulled back from the highs elsewhere. Importers and exporters should trade the range for the rest of the week.

AUD-NZD: The Tasman Cross has ignored the spike in NZ unemployment as RBNZ Governor Wheeler’s speech did not mention any more on an interest rate cut, nor did he mention anything about ways to curb the overheating housing market. The upward channel has now broken and we are well into over sold territory. Barring any shocks from Australian events over the next 24 hours or so, we see a recovery as we head towards the weekend.

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