5th June – Daily Currency Market Report.

The market in brief:

  • AUD opens 1c lower
  • NZD down 30+ points
  • Australian Retail Sales flat
  • Australian Trade Deficit widens
  • Bank of England keeps policy on hold
  • Greece ask to make bulk payment
  • US Weekly Unemployment down
  • Gold at $1,177 & Brent Crude at $62

Market moving events due:

  • OPEC meetings
  • US Non-Farm payrolls
  • US Unemployment Rate
  • G7 Meet

AUDUSD: A disappointing print in domestic retail sales and a weather effected trade balance (exports slowed due to storms at major ports), coupled with a drop in commodity prices all conspired to push the Aussie Dollar 100+ points lower. The all-important US jobs numbers come this evening and with a healthier print expected the Aussie may have further to go. Technically the April lows, 100 points below, is medium term support but a break through there paves the way to the 2 year old downward channel sitting 3 cents below.   

AUDEUR: Greece has become the first country since Zambia in the mid 1980’s to ask that it bulks all this month’s debt repayment into one due by the end of the month. Expectations are that this wish will be granted and therefore gives the powers that be another 3 weeks to finalise a deal. That news has pushed this pair down to February lows and we may still have more of this move left, given the negativity surrounding the Aussie Dollar and the fact we have another 100 points until we hit the 50% retracement of the upward move that went from January last year till April of this.

AUDGBP: The Pound has strengthened again due to the weaker than expected Australian data and as the Bank of England kept monetary policy on hold, (as it has done for the last 6 years). An increasing number of reports are suggesting an interest rate hike from the Poms come early 2016 and with the uncertainty going on over in Europe, the Pound is everyone’s friend at the moment. Medium term then we have no reason to change our mind and keep to the 44pence target.

AUDNZD: The Tasman Cross opens a cent lower as the Australian economic picture took a hit, although drilling down into the numbers we feel this is but a temporary blip. With no NZ data due today, we see the overnight losses getting gradually erased as the cheaper Aussie Dollar gets bought. We’ll reiterate our medium term target is 1.12+ further out.

Quote of the day: It is a costly wisdom that is bought by experience. Roger Ascham 

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 if the rate improves or if not required.

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