9th November – Daily Currency Market Report

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The Market in Brief:

  • AUD holds downward channel
  • NZD down 2.5c on week
  • RBA leave door open for a rate cut
  • UK Manufacturing up
  • US NFP up sharply
  • US Unemployment rate drops to 5%
  • Chinese Trade Balance increases
  • Gold $1,188 & DJIA 17,905

Market Events Due:

  • Australian Job Adverts
  • Euro group meetings

 

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AUDUSD: The Australian Dollar sunk just shy of 150 points upon release of US Non-Farm Payrolls that produced a number 100k more than had been expected. The data also pushed the unemployment rate down to a 7.5 year low of 5% and most likely to have forced the FOMC’s hand into an interest rate hike next month. On the charts we have held the downward channel and the only chance of a break higher may come with a solid domestic employment number on Thursday.

AUDEUR: Has spent the 3rd consecutive day trading along the 50% Fibonacci retracement of the 6 month sell off. A raft of weak second tier data also keeps the Euro pressured. We should maintain the range at least until Wednesday night’s speech by ECB Chairman Draghi.

AUDGBP: Did surprise to the upside as late comers continued to sell out of Sterling, following last week’s comments from the BoE that an interest rate hike may be some time away. Nonetheless technical resistance held firm, as forecast, and the pair swiftly retraced back into the downward channel. UK Unemployment is our only focus this week, but not expected to shock, so we see lower levels to come.  

AUDNZD: Held a 60 point range to close flat as both currencies traded in a similar fashion upon release of the US data. The only NZ focus this week is the RBNZ Financial Stability report and a speech by the central bank Governor. Therefore direction will come from Australian and also Chinese numbers over the next handful of days.

QUOTE OF THE DAY: Lest We Forget

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Jim Devonport

Corporate & HNW Client Manager 

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