The Greenback falls slightly amid bets that the Fed will send easing signals this week.

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USD – United States Dollar

Fed Chair Jerome Powell testifies on Capitol Hill tomorrow and Wednesday to deliver his semi-annual policy report. Market participants will be eager to hear what he has to say and if he provides any hints of change in the so-far robust American economy (such as an easing signal in the next FOMC). What the U.S. dollar has not priced in until now is a probable economic disruption from the coronavirus, which for now seems to be helping the U.S. dollar. Still, today it showed some weakness, probably due to profit-taking action by market participants. Inflation numbers and the University of Michigan Sentiment will be released on Thursday and Friday, respectively, and both can either continue to fuel the rally in the U.S. dollar or the contrary.

According to the Commodity Futures Trading Commission, in the futures markets, there were more flows buying U.S. dollars and Japanese Yen, which reflects up to last Tuesday even though it was released last Friday. This indicates a clear tilt towards risk aversion.

Key Movers

The Euro increased slightly against the U.S. dollar by 0.04 percent after five sessions of losing. So far, the uncertainty of the coronavirus has lifted Asian currency volatility to its highest level in six months and the Greenback to a two-month high.

For now, it will be interesting to follow the AUD/JPY and NZD/JPY pairs to know about how risk is increasing or decreasing. Both pairs can be used as proxies for capturing potential volatility in the global currency market.

In Canada, housing starts increased to 213.2k in January versus an estimated number of 205k. The previous number last month was 196k. Month to month represented an increase of 8.8 percent. However, the Loonie is ignoring the good news and it is falling versus the U.S. dollar 0.11 percent. The reason for the Loonie’s weakness is crude oil’s price pointing towards more losses. Furthermore, significant speculative net-long Canadian currency futures positions fell to 18,563, the lowest since the week ending on January 3rd, according to the latest CFTC data.

Expected Ranges

USD/CAD: 1.3300 – 1.3340 ▲

EUR/USD: 1.0881 – 1.0943 ▼

GBP/USD: 1.2913 – 1.2953 ▲

AUD/USD: 0.6650 – 0.6690 ▼

NZD/USD: 0.6375 – 0.6445 ▼


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Aussie Dollar falls to lowest level since 2009

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AUD – Australian Dollar

Friday’s session saw the Australian Dollar fall from 0.6720 to 0.6662 against the US Dollar, representing its lowest level since the GFC. The AUD, which continues to trade as a proxy for Chinese and global growth, has been burdened by the ongoing Coronavirus situation as the number of confirmed cases continue to rise at a steady pace. Although we did have less dovish commentary from RBA governor Lowe last week, it was not enough to support the AUD as it remained firmly under the 0.67 handle. Lowe pointed to financial stability concerns as a core reason for the central bank’s reluctance to ease rates further this month.

Monday’s session is light on the data front as we expect the AUD to continue to trade on global risk sentiment and in particular, developments in the Coronavirus situation. Analysts will be looking to Chinese inflation and lending data for January as a gauge of how the Chinese economy was tracking before the virus outbreak. We also could see some spillover from the RBNZ cash rate decision on Wednesday, although they are expected to keep rates on hold. From a technical perspective, initial supports can be seen at 0.6662 with any moves lower expected to find further support around 0.6650. On the topside, resistance is expected on moves approaching 0.67 and 0.6724.

Key Movers

Market sentiment continues to deteriorate amid growing concerns around the Coronavirus epidemic gripping Asia. Although we did see some stronger than expected US employment data out of the worlds largest economy on Friday, we saw classic risk off flows as traders continued to brush aside economic data in favor of risk sentiment. US non-farm payrolls were much stronger than expected, coming in at 225K for the month whilst the unemployment rate continues to remain at historical lows.

Safer currencies rose on Friday with the JPY the best performer on the day, ranging between 1.954 and 110 against the USD. The USD index was also up on the day with the EUR falling 40 points from 1.0980 to 1.0942, representing a four-month low. In line with risk sentiment, commodity prices were soft as Crude fell 1.1%, copper 1.3% whilst gold rose 0.2%. With a slow start to the week on the data front, we’re expecting market pricing to continue to take its cues from the evolving coronavirus situation, with growth correlated currencies AUD and NZD to be particularly vulnerable to developments. Notable risk events later in the week are not only the RBNZ’s monetary policy statement on Wednesday but also UK Q4 GDP numbers due out Tuesday, testimony from Fed Chair Powell on Thursday and US CPI numbers due out on Friday.

Expected Ranges

AUD/USD: 0.6625 – 0.6724 ▼

AUD/EUR: 0.6070 – 0.6110 ▼

GBP/AUD: 1.9253 – 1.9351 ▲

AUD/NZD: 1.0393 – 1.0450 ▼

AUD/CAD: 0.8840 – 0.8910 ▼


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The U.S dollar moves sideways after mixed data in employment.

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USD – United States Dollar

The U.S dollar was a mixed bag after the U.S. reported non-farm payrolls rose 225k, which was better than anticipated, but manufacturing payrolls fell 12k versus a forecast of -2k. In general, positive data should be supportive of the U. S dollar over the next few days.

Key Movers

The USD/JPY pair was down 0.2 percent at 109.80 vs 109.92 before the U.S. jobs report. The EUR/USD pair was down 0.2 percent, around 1.0965, before the employment data release.

Despite the gains realized in employment data in Canada, especially in the full-time sector, soft productivity is not helping the Loonie to rally. This shows that productivity in Canada is dropping, despite the labour sector adding jobs.

The Loonie was weaker overnight against the Greenback as oil prices soften amid lingering concern about the spread of the Coronavirus. The USD/CAD pair trades at 1.310 after touching an intraday low of 1.3276 right after the jobs release.

Expected Ranges

USD/CAD: 1.3267 – 1.3321 ▲

EUR/USD: 1.0950 – 1.1013 ▲

GBP/USD: 1.2940 – 1.2991 ▲

AUD/USD: 0.6662 – 0.6702 ▲

NZD/USD: 0.6400 – 0.6457 ▲


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Retail sales miss hampers AUD’s shallow upturn

OFX Daily Market News

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AUD – Australian Dollar

Despite a sustained improvement in the demand for risk the Australian dollar failed to maintain upward momentum drifting off intraday highs at 0.6765 and closing lower on Thursday. Softer than anticipated domestic retails sales data and a surprise trade balance contraction dampened demand for the AUD while strength across US labour market indicators helped bolster demand for the world’s base currency. Retail sales data showed consumer spending fell further than anticipated in December a typically strong month for retailers and shoppers spend in the lead up to Christmas. Contracting 0.5% the print suggest a correction following Novembers surprise uptick and marks the 5th monthly decline through the last 6 months, a sign consumer confidence continues to falter. Moving back through 0.6750 the AUD touched intraday lows at 0.6727 as attentions turn to todays RBA monetary policy statement.

Having offered little outside the status quo message after Tuesdays rate announcement today’s quarterly monetary policy review offers a deeper insight into RBA policy thinking. While the labour market continues to underpin the broader economy, other key economic indicators persistently falter amplifying calls for further monetary policy action. Any hint the RBA is leaning towards another rate cut in the first half of 2020 could force the AUD back below 0.67 and test support at 0.6680.

Key Movers

The Great British Pound extended losses through trade on Thursday falling below 1.2950 as uncertainty surrounding trade talks and Britain’s future relationship with the EU weighed on investors. Having enjoyed a period of relative optimism and an expectation that both the UK and EU had at last found some common ground the stalemate and standoff resurfaced. Trade talks have soured already, while comments from French Finance Minister, Bruno Le Maire, suggesting British financial services firms will not have access to EU markets unless they agree to EU rules amplified the divide between British and European expectations. Having fallen 2% this week Sterling touched intraday and year to date lows at 1.2922 and we expect only shallow and short run rally’s through the coming weeks and months with the overwhelming bias still skewed to the downside, that is until a trade agreement and true exit strategy is reached.

Safe haven assets fell for a fourth consecutive day, with both the Yen and Swiss Franc losing ground against the USD as investors appetite for risk continued to improve. Measures taken by Chinese health and economic officials have encouraged markets, fostering increased optimism that the spread of the virus will be contained while the economic fallout will be muted by stimulus measures. The PBoC has pumped billions of dollars into the economy and financial system this week in a bid to get in front of any slowdown that might arise as a result of the virus while officials report “positive” results in preventing further widespread contamination.

The Euro touched two-month lows against the Greenback following weaker than anticipated industrial manufacturing orders in December. Data showed new orders for German made goods fell over 2% in the lead up to X=Christmas, the largest monthly depreciations in 10 months and well off the forecast .6% upturn. Falling below 1.10 the Euro opens this morning at 1.0978.

Expected Ranges

AUD/USD: 0.6680 – 0.6770 ▼

AUD/EUR: 0.6080 – 06150 ▼

GBP/AUD: 1.8970 – 1.9330 ▼

AUD/NZD: 1.0350 – 1.0480 ▲

AUD/CAD: 0.8890 – 0.8990 ▼


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The Greenback is trading to new one-month highs, backed by robust economic data.

OFX Daily Market News

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CAD – Canadian Dollar

The U.S. dollar is steady and haven currencies such as the Japanese Yen are slightly lower as virus concerns have begun to fade among market participants and investors and after China said it plans to half tariffs on some imports from the U.S. later this month.

U.S. jobless claims fall 15k to 202k, versus an estimated of 215k; the lower the number relative to the expected value, the better for the U.S. dollar, such as in this case.

Yesterday, Mary Daly, San Francisco Fed President, said in regards to the Coronavirus, “I expect China to have a couple of quarters of weaker growth and then bounce back once this has been resolved, and then that to have a temporary impact on the U.S. economy and go away once things have been resolved.”

Key Movers

The EUR/USD pair touched its daily high of 1.1014 after European Central Bank President Christine Lagarde told European Parliament lawmakers that policymakers have few options for more monetary stimulus after many years of economic crisis-fighting. She was implying that the ECB will not be more dovish or cut rates in even more negative territory. However, the EUR/USD pair is up only 0.05 percent, trading at 1.1003 at this moment.

Expected Ranges

USD/CAD: 1.3243 – 1.3323 ▲

EUR/USD: 1.0986 – 1.1023 ▲

GBP/USD: 1.2941 – 1.3000 ▼

AUD/USD: 0.6721 – 0.6747 ▼

NZD/USD: 0.6450 – 0.6490 ▼


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AUD consolidates gains as demand for risk improves

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar closed higher on Wednesday as a sustained demand for risk and easing fears surrounding the market impact of the coronavirus helped foster an extension of early week gains. Reports a possible vaccine and drug to contain the Coronavirus hit the wires prompted an AUD advance and helped touch intraday highs at 0.6770 before strength across US domestic data sets forced a correction back below 0.6750. Having bounced off year to date lows at 0.6680 a renewed demand for risk and an ongoing improvement in markets assessment of the economic impact of the coronavirus have helped move off key technical supports as attentions turn to key commentary from RBA governor Lowe and the RBA’s monetary policy statement. Having opted to leave rates on hold Tuesday, while maintaining optimistic growth forecasts markets will be keenly attuned to governor Lowe’s words, seeking any signal monetary policy setters will lower rates again as early as March. With resistance on moves approaching 0.6780 and support in tact at 0.6680 we expect the AUD to maintain recent ranges with moves skewed by fluctuations in risk demand driven by coronavirus headlines.

Key Movers

The US Dollar advanced against haven counterparts through trade on Wednesday, buoyed by an extension in heightened risk demand and an uptick in private payroll data. Unchecked reports a possible treatment in the fight against the coronavirus bolstered markets demand for risk driven assets forcing a correction in Yen and Swiss franc. Investors looked to consolidate greenback gains through the north American session as ADP private payroll data, showed 291,000 new employment opportunities were added to the US economy through January, well above the 156,000 anticipated and the largest monthly advance in almost 5 years. Having touched two-week highs against the Yen the dollar forced the Euro lower and prompted a test of 1.10 while the dollar index pushed through 98, up three tenths of one percent to 98.264. Attentions now turn to commentary from ECB president Lagarde Thursday ahead of key Non-Farm payroll and labour market data Friday.

The Great British Pound fell through trade on Wednesday, slipping back below 1.30 as US dollar strength and sustained uncertainty surrounding the post Brexit landscape hampered sterling demand. Having touched lows at 1.2940 the Pound remains largely range bound with upside moves heavily dependent on EU trade talk headlines. With little of note on the domestic macroeconomic docket attentions turn to key US data sets and trade updates/commentary for direction into the weekly close.

Expected Ranges

AUD/USD: 0.6680 – 0.6780 ▲

AUD/EUR: 0.6030 – 0.6230 ▲

GBP/AUD: 1.8980 – 1.9380 ▼

AUD/NZD: 1.0360 – 1.0520 ▲

AUD/CAD: 0.8930 – 0.9010 ▲


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Employment data smashes expectations, pushing the Greenback to a seven-day high.

OFX Daily Market News

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USD – United States Dollar

The Greenback strengthens, reaching a new seven-day high, following stronger than forecasted U.S. ADP employment change report results. 157 k was expected, but the actual number came in at 291 k in January, according to the ADP National Employment Report. These buoyant results follow the ISM’s Manufacturing Purchasing Managers’ Index also exceeding expectations.

In a few minutes, market participants are expecting the release of ISM Non-Manufacturing Purchasing Managers’ Index, which should provide some insight into the services sector.

Key Movers

In the U.K., the Pound reversed earlier gains against the U.S. dollar on news that the European Union could enforce rules that could impact London’s banking sector.

In New Zealand, the unemployment rate was expected to hold steady at 4.2 percent, but it came in at 4 percent. However, the NZD/USD is slightly falling, and it is currently trading at 0.6488 because business sentiment remains moderated, although it improved over the last quarter in 2019. Hiring intentions have improved, as well.

The Loonie has not changed this morning versus the U.S dollar, and it is trading at 1.3280. Meanwhile, Canada’s international merchandise trade came in at -$0.37 billion versus the -0.61 billion expected. The higher the number compared with the forecast, the better for the Loonie. In terms of percentage, exports rose 1.9 percent in December, mostly due to higher crude oil exports according to Statistics Canada.

The most important news for the Loonie will be Governor Council Wilkins’ speech at 12:30pm EST today.

Expected Ranges

USD/CAD: 1.3260 – 1.3304 ▼

EUR/USD: 1.0992 – 1.1035 ▼

GBP/USD: 1.2941 – 1.3006 ▼

AUD/USD: 0.6726 – 0.6765 ▼

NZD/USD: 0.6449 – 0.6500 ▼


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Aussie ticks higher as interest rates on hold and risk demand improves

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar edged higher through trade on Tuesday, pushing back through 0.67 US cents following the RBA’s monetary policy announcement. As expected, policy makers opted to leave rates on hold and while acknowledging the bushfires and coronavirus will likely have a dampening effect on domestic economic growth through the year ahead the board maintained optimistic expansion forecasts. The AUD jumped to touch 0.6725 and held gains through the European and North American trading day as demand for risk improved. Market concerns surrounding the coronavirus eased bolstering equities and underpinning the AUD uptick while firming supports at 0.6680.

Attentions now turn to RBA Governor Lowe for further monetary policy direction and colour surrounding the Central Banks outlook. We’d expect Lowe to maintain much the same narrative, however with such a tumultuous start to 2020 investors will be looking for any indication the RBA will look to immediately extend its easing bias. Watch supports at 0.6680 with resistance on moves approaching 0.6730/50.

Key Movers

Safe haven’s underperformed through trade on Tuesday as demand for risk improved following reduced fears surrounding the economic and market impact of the coronavirus. The Yen and Swiss Franc retreated for the 2nd consecutive day as measures from Chinese and Global health officials to contain the outbreak seemingly dampened broader fears. The USD advanced against the Yen up seven tenths of one percent, while the Swiss Franc fell 0.3% as the People’s Bank of China continued to pump funds into the economy in a bid to maintain economic liquidity and stabilise the market.

Attentions remain with coronavirus updates while US domestic politics takes centre stage. Results in the Iowa democratic caucus are expected to filter through today with a win for Bernie Sanders or Elizabeth Warren could hurt shares and foster a shift toward safe haven currencies.

The Great British Pound recouped some of the weeks earlier losses following stronger than expected construction data. The surprise uptick offset recent fears of a hard Brexit and helped propel Sterling back through 1.30. Attentions remain with Brexit trade talks as the primary driver governing Sterling direction. As long as the EU and UK continue to clash over the structure off a post Brexit trade deal we expect both the GBP and Euro to experience headline volatility with support on moves below 1.2950/1.29 and resistance on extensions toward 1.3180/1.32.

Expected Ranges

AUD/USD: 0.6680 – 0.6780 ▲

AUD/EUR: 0.6030 – 0.6130 ▲

GBP/AUD: 1.9250 – 1.9550 ▼

AUD/NZD: 1.0350 – 1.0450 ▲

AUD/CAD: 0.8880 – 0.8980 ▲


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The Greenback retraces following China pumping money into their economic system.

OFX Daily Market News

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USD – United States Dollar

The U.S. dollar is down as market participants weigh the latest efforts to contain the deadly Coronavirus and China’s attempts to support its economy. At the same time, the Chinese Yuan rallied as the central bank set the currency’s reference rate at 6.9779 per U.S. dollar, stronger than the official close on Monday.

Later today, Raphael Bostic, Atlanta Fed President, commented on the Coronavirus, stating: “…that situation is incredibly fluid, and our understanding about what the virus means is changing on a daily basis… If that understanding starts to stabilize, I think we’ll get to a place where we can start to do some modelling to really understand what we’re dealing with.” He will provide another speech later today from California, which might impact the U.S. dollar during the day.

Key Movers

The Aussie dollar erased yesterday and Friday’s losses following the RBA rate announcement, which held rates at 0.75 percent and signaled economic improvement along with keeping virus fears in check. The RBA mentioned in a statement that, “In the short term, the bushfires and the coronavirus outbreak will temporarily weigh on domestic growth.” The RBA said it will keep its easing bias in place, while noting that low borrowing costs have helped the economy and strengthen heavily-indebted households’ balance sheets. The RBA added that strength in labour and property markets gives it room to wait and see how badly a slump will hit the economy and China’s growth. The AUD/USD pair is increasing 0.34 percent at the time of this writing.

The British Pound rose 0.18 percent versus the Greenback when market participants were no longer pricing in an interest-rate cut this year by the BOE. One of the positive catalysts came from the construction purchasing managers’ index for January, which came in at 48.4 versus expectations for 47.1. This follows better-than-expected services data last month. Despite PM Johnson’s “free-trade” speech not backing down on his more aggressive stance around trade with the EU, the Pound bounced. Technically speaking, it had a brutal reversal at 2:00 am EST this morning, when the GBP/USD was trading at one-month lows at 1.2941. From there, it has increased around 90 pips and it is trading at 1.3030 at the time of this writing

Expected Ranges

USD/CAD: 1.3274 – 1.3318 ▼

EUR/USD: 1.1035 – 1.1060 ▼

GBP/USD: 1.3007 – 1.3078 ▲

AUD/USD: 0.6700 – 0.6755 ▲

NZD/USD: 0.6459 – 0.6500 ▲


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Aussie vulnerable as contagion spreads and attentions turn to RBA policy announcement

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar offered little to excite investors through trade on Monday, failing to capitalise on an upswing in risk sentiment and promises from China’s central bank to underpin the economy in a bid to ease the economic burden. With markets reopening for the first time after the Chinese New Year, investors looked to play catch hammering equities and the Yuan alike. The PBoC then stepped in announcing an injection of liquidity and broader monetary policy supports across the economy. Having touched year to date lows at 0.6883 the AUD remained largely range bound, struggling to make a meaningful break back above 0.67. With such a heavy exposure to China we can expect demand for the AUD to remain subdued until there is a clear improvement in Coronavirus management.

Attentions today turn to the RBA and its first policy meeting for 2020. With the majority of analyst expecting the RBA to maintain its current policy setting we expect little impact to broader AUD values. That said, policy setters may be inclined to cut rates in a bid to get ahead of any economic slowdown caused by the impacts of the coronavirus. While the likelihood of such a move remains low, a surprise cut would force the AUD below supports at 0.6680 and prompt a run toward 0.6630/0.66.

Key Movers

The US Dollar advanced through trade on Monday, recouping losses suffered against safe haven counterparts, the Yen and Swiss Franc, as tensions over the economic impact of the coronavirus eased and domestic manufacturing data showed a surprise uptick through January. Advancing three tenths of one percent against both haven assets the dollar also forced the Euro back below 1.1050 while the Great British Pound suffered a heavy sell off as fears a hard break from Europe was still in play. Advancing 0.4% the dollar index opens this morning at 97.84

The Great British Pound lost 200 points through trade on Monday and was the worst performer when compared with its major counterparts. Fears Britain will fail to secure a favourable trade deal with Europe before the end of the 11 month transition period escalated on Monday after Prime Minister Johnson adopted a tough and hard lined tone when laying out his plan for future relations. Falling through 1.31 and 1.30 Sterling opens this morning at 1.2990. Attentions now remain squarely affixed to trade discussion with headline updates expected to drive direction as investors and businesses try to position themselves.

The Chinese Yuan touched seven-week lows through early trade on Monday before pairing losses and recouping some lost ground as investors and markets found a renewed appetite for risk. Efforts from Chinese health officials to contain the virus and moves from the Peoples Bank of China to stabilise the economy and minimise the expected economic impact bolstered market sentiment. Having lowered interest rates on reverse purchase agreements and promised to implement a variety of monetary policy tools to ensure the economy remains liquid China’s Central Bank has actively eased market concerns. That said the state of the virus and the spread of the contagion remains unchanged and until a vaccine is available or the virus is contained we expect market sentiment will continue to see saw.

Expected Ranges

AUD/USD: 0.6630 – 0.6730 ▼

AUD/EUR: 0.5990 – 0.6130 ▲

GBP/AUD: 1.9080 – 1.9730 ▼

AUD/NZD: 1.0290 – 1.0430 ▲

AUD/CAD: 0.8830 – 0.8930 ▲


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