5th November – Daily Currency Market Report

CompassLandscape1

 

The Market in Brief:

  • AUD holds downtrend
  • NZD pulled lower
  • NZ Unemployment up to 6%
  • Australian Retail Sales steady
  • Australian Trade Balance improves
  • UK Services up
  • US Trade Balance improves
  • US Non-Manufacturing up
  • FOMC’s Yellen suggests a December hike
  • Gold $1,107 & DJIA 17,849

Market Events Due:

  • RBA’s Stevens speaks
  • More Fed speak
  • Bk of England meet
  • US Weekly Unemployment Claims

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AUDUSD: Positive local data pushed the A$ higher, but it hit firm technical resistance of the downward channel. Impressive US economic data and a speech by FOMC Chief Yellen suggesting a Christmas interest rate hike is on the cards saw this pair sink again. RBA Governor Stevens speaks this morning and we have more Fed chatter this evening. The downward channel should continue to hold.

AUDEUR: This pair continues to impress as the Euro now sits firmly below 1.10 against the US Dollar. The European Commission release their EU economic forecasts this evening which should keep us trading around the 50% retracement of the 6 month sell off for now, but will need local data to spark a sizeable move higher in due course.

AUDGBP: Sterling strengthened yesterday as UK Services sector data impressed and as we wait for the bank of England meeting this evening. There has been reports suggesting the BoE might raise interest rates before their US counterparts and this evening’s communique should confirm or deny that. Until then we’ll hold the lower end of the channel.

AUDNZD: A 3rd solid day of gains for the Tasman Cross to hit 3 week highs as NZ Unemployment ticked higher, adding to prior weaker than expected data. We should have a minimum 100 points of upside still to come in the short term.

QUOTE OF THE DAY: Remember remember the 5th of November. Gunpowder, treason and plot. I see no reason why gunpowder and treason should ever be forgot. Guy Fawkes 

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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