The market in brief:
- AUD back at its highs
- NZD also recovers
- EU Retail Sales fall
- US Fed FOMC minutes more hawkish
- Gold down at $1,202 & Brent Crude at $56.05
Market moving events for the next 24 hours:
- UK Trade Balance
- UK Halifax House Price Inflation
- Bank of England meet
- US Weekly Unemployment Claims
AUD-USD: The Australian Dollar had a solid session, climbing throughout the day in anticipation of the release of minutes from the most recent US Federal Reserve’s FOMC meet. Price action became more volatile during the London and New York sessions, as is the way of course, seeing the Aussie bounce around and ultimately give up half of the near USD 1 cent gains. The minutes show that the Fed is now more balanced in their views with some members actually stating they would like a hike to interest rates in June. Nonetheless we’ll stick with our belief of a move in September, which therefor supports our view of a stronger AUD going forward. In the meantime we have no major data for the rest of the week, except Chinese inflation tomorrow, so cannot see a reason for a push on. Technically resistance sits at the overnight highs, being the 50% retracement of the 2 month long range. Support for those looking to buy AUD sits at the bottom of the upward channel 50 points below.
AUD-EUR: The Euro has weakened across the board as the Greek debt issues persist; EU Retail Sales data saw the first decline in 5 months and also due to a recovering US Dollar. On this cross however the Aussie has pushed on to hit trend line resistance from the highs seen throughout the latter part of March. Other than the Greek debt repayment, there is no fundamental news due from either continent so we cannot see a break higher just yet and suggest EUR buyers take these rates. AUD buyers with Euro receipts can wait for the correction over the next 2 days.
AUD-GBP: The Pound has been supported as money flows from Europe and as we wait for the Bank of England meeting this evening. The Old Lady of Threadneedle Street is not expected to give us any reason for excitement, however the market must show respect just in case. The market moving event may be tomorrows UK Manufacturing number so until then we’d expect the charts to hold sway and tread water inside the downward channel. Both resistance and support remain 100 points away.
AUD-NZD: The Tasman Cross has traded sideways as the market looks offshore and as we appear happy “up here” and well away from thoughts of parity. There is no NZ news due until Tuesday, so until then this pair should trade an uneventful path and in an area that is still relatively attractive for both buyers and sellers of the Kiwi.
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