Australian dollar remains range-bound

OFX Daily Market News

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AUD – Australian Dollar

The US Thanksgiving holiday has meant markets have barely moved overnight leaving the Australian dollar little changed against the Greenback. Yesterday we saw the Aussie trade in a tight trading range between 0.6759 – 0.6777. On the back of risk aversion the Aussie dollar hit a daily low of 0.6759 as US President Trump’s decision to sign the bill, voted by almost all members of the US House and Senate, supporting pro democracy protesters in Hong Kong by putting the city’s special trading status under US law under annual review.

On the data front yesterday Q3 Private Capital Expenditure decreased by 0.2% more than the 0.1% decline forecasted. Looking ahead today and we will see the release of October HIA New Home Sales and Private Sector Credit for the same month. From a technical perspective, the AUD/USD pair is currently trading at 0.6767. We continue to expect support to hold on moves approaching 0.6730 while now any upward push will likely meet resistance around 0.6800.

Key Movers

The Pound sterling overnight briefly touched near seven-month highs against the euro on a poll predicting a comfortable election victory for the ruling Conservatives. UK Prime Minister Boris Johnson is on course to win a majority of 68 in parliament, according to a model from pollsters YouGov that accurately predicted former prime minister Theresa May’s loss of her majority in a 2017 election. However, a hung parliament still not off the table. From a technical perspective, the pound rose to a one-week high of $1.2953 against the Greenback, then slipped, ending 0.2% weaker on the day to $1.2907. On the release front yesterday in the UK November Nationwide Housing Price Index, which was up by 0.5% MoM and by 0.8% YoY, beating the market’s expectations. This Friday, the UK will release the GFK Consumer Confidence Survey, seen at -14 in November, unchanged when compared to the previous month. Looking ahead today and we will see the release of both October Mortgage Approvals and Money data.

GBP/AUD: 1.9000 – 1.9200 ▼

AUD/NZD: 1.0450 – 1.0650 ▼

AUD/EUR: 0.6050 – 0.6250 ▼

AUD/CAD: 0.8900 – 0.9100 ▼


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AUD sees temporary dip after Westpac changes it’s house forecasts

OFX Daily Market News

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AUD – Australian Dollar

The Australian Dollar saw a dip during yesterday’s midday trading session after Westpac changed it’s forecast on the back of Governor Lowe’s speech on quantitative easing on Tuesday night. Their previous forecast was for the policy rate to fall of 0.5%, but now Westpac predicts that RBA is likely to cut interest rates twice next year, taking the cash rate to 0.25% and then introduce quantitative easing. The AUD since than has clambered up to open at 0.6777 against the USD this morning.

The Australian Bureau of Statistics will release their quarterly report on private capital expenditure just before midday today. Showing the change in the total inflation-adjusted value of new capital expenditures made by private businesses it is a leading indicator of economic health and expected to have a major impact on the AUD.

Key Movers

In the UK, a YouGov poll will release their multi-level regression poll of the UK general election. An MRP is generally accepted to be more accurate than normal polling, as it is carried out nationwide and uses a mathematical model of how various groups of people are likely to vote. The MRP model correctly predicted the 2017 UK general election result that former PM Theresa May will lose her majority and is currently showing that PM Boris Johnson is on course to secure a “significant majority” a Guardian journalist said, citing a source who has seen the poll.

We saw a plethora of data being release in the US ahead of Thanksgiving day tomorrow, with the most important of these being the Chicago PMI. This data shows the level of diffusion index based on a survey of around 200 purchasing managers in Chicago and came in at 46.3, lower than it’s forecasted rate of 47.2 indicating contraction.

In terms of other macroeconomic data, over in Canada they will be releasing their monthly GDP data just after midnight on Saturday. The data will show the change in the inflation-adjusted value of all goods and services produced in the economy and is the primary gauge of the economy’s health.

Expected Ranges

AUD/CAD: 0.8930 – 0.9045 ▼

AUD/EUR: 0.6080 – 0.6195 ▼

GBP/AUD: 1.8795 – 1.9285 ▲

AUD/NZD: 1.0485 – 1.0595 ▼

AUD/USD: 0.6700 – 0.6845 ▼


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Aussie range bound in absence of headline data news

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar offered little to excite investors through trade on Tuesday, bouncing between intraday lows at 0.6772 and session highs at 0.6794. While the S&P enjoyed modest gains, moves across currency markets remained largely muted with little of note driving direction throughout the domestic session. Investors largely sat on the sideline ahead of commentary from RBA Governor Lowe, as the central bank head addressed attendees at the Australian Business Economists Dinner. Markets largely ignored Lowe’s comments as he reiterated his belief the RBA would not be forced to adopt unconventional tools while lowering the baseline interest rate handle wherein such policy tools would need to be considered. Lowe suggested the lower bound for interest rates actually sits at 0.25% affording the RBA two more rate cuts before quantitative easing would be contemplated.

Attentions now turn to domestic Construction data and a host of US data sets headlined by Chicago PMI manufacturing numbers and core PCE inflation data, the Fed’s preferred measure of inflation. With monetary policy expectations largely priced in leading into the end of 2019 anything short of a significant miss on the aforementioned data sets will likely mean low level volatility will continue into the end of the trading week. Volatility instead will be derived from US-China trade talk progress. Negotiators appear to be moving closer to reaching a phase one deal, while US support for Hong Kong drives a wedge between the two superpowers.

Watch supports at 0.6770 and 0.6730 with resistance on moves approaching 0.68 and 0.6830.

Key Movers

Broader currency markets were largely muted through trade on Tuesday as trade new headlines have little impact in the absence of any concrete evidence a deal will be struck while broader macroeconomic indicators remain steady and monetary policy movements globally appear to have stalled as central banks assess recent moves and their relative impact.

US consumer confidence data was weaker overnight , falling for the fourth consecutive month, while New home sales data was strong as low interest rates and a strengthening labour market bolstered buyer confidences. The US found further support in a surprise narrowing of the trade deficit (although some what skewed by timing of tariffs) leading to increased expectations for Q4 growth and a period of stability across Fed interest rates.

Sterling remains vulnerable to polling news ahead of the election falling as labour seemingly narrows the gap to the ruling conservatives. Down 0.3% Sterling opens at 1.2863.

Expected Ranges

AUD/USD: 0.6730 – 0.6830 ▲

AUD/EUR: 0.6130 – 0.6180 ▲

GBP/AUD: 1.8820 – 1.9120 ▼

AUD/NZD: 1.0490 – 1.0620 ▼

AUD/CAD: 0.8980 – 0.9060 ▲


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US Dollar Will Take its Lead From Q3 Annualized GDP Today

OFX Daily Market News

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USD – United States Dollar

US Dollar Market participants have a plethora of high and medium-tier data to digest before carving the Thanksgiving Turkey ahead of US Thanksgiving put a halt of volatility with US Markets closed tomorrow and again at noon on Friday.
Durable Goods Orders and quarterly Gross Domestic Product fundamentals are released. Expectations for Durable Goods for October are for -0.7%, while consensus QoQ GDP annualized is for 1.9%, and Q3 GDP was expected at 1.7%. The actual releases showed durable goods at 0.6% while GDP figures came in at 2.1% and 1.7%, respectively. Personal Consumption, weekly Continuing, and Initial Jobless claims were also released at 8:30 am, followed by Chicago Purchasing Managers numbers for November at 9:45 am. If you haven’t got your fill of market data for the US, you can belly up to the economic table and sink your teeth into US Core PCE YoY for October. Pending Home Sales, Personal Spending, Personal Income, to name a few, and just when you think you had enough save room for Crude Oil Inventories at 10:30 am. US equity markets are flat from yesterday’s minimal gains, but gains none the less. We will see if Market Participants want to hold stocks that are at all-time highs or take profits to cover Black Friday deal purchases.
Phase One of the US-China trade agreement is near completion according to comments from President Trump, who is reviewing the terms to ensure the US comes out on top. Other Trump news as the impeachment inquiry moves forward with the President being invited to present his case to the impeachment panel on December 4th.

Key Movers

GBP slipped lower yesterday after a poll was released showing a tightening in the gap between Labour and the Conservatives. A further couple of polls released this morning have shown similar trends, putting the pound under additional pressure in early Europe; a poll by Kantar puts the Tories on 43% (-2) and Labour on 32% (+5).
Markets are now awaiting the release of the YouGov Multilevel Regression and Post Stratification Poll (MRP) at 10pm GMT today. The poll uses a recently developed technique that aims to give a more detailed prediction than a standard opinion poll – it was the most accurate forecaster in 2017 polls. So it could move sterling crosses overnight/tomorrow morning, with it also combining with thin market trading conditions due to Thanks Giving in the US tomorrow.

Expected Ranges

EUR/USD: 1.0995 – 1.1025 ▼

GBP/USD: 1.2826 – 1.2894 ▲

USD/CAD: 1.3260 – 1.3333 ▲

AUD/USD: 0.6771 – 0.6791 ▼

NZD/USD: 0.6771 – 0.6791 ▼

NZD/USD: 0.6417 – 0.6435 ▼


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Aussie Hits November Low Before Lowe’s Speech

OFX Daily Market News

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AUD – Australian Dollar

AUD underperformed against most of its major peers as the currency begins to slide coming into Governor Lowe and Guy Debelles’ speeches this week.

AUDUSD maintained its offer-tone overnight dropping from yesterday’s high of 0.6803, touching a November low of 0.6768 during the New York session. It is currently sitting at 0.6780 ahead of ANZ Roy Morgan Weekly Consumer Confidence Index to be released this morning at 9.30am (AEDT).

Key levels of intra-day support to watch are 0.6768 (November & Intra-Day Low). Resistance sits at 0.6806 (50-Day Moving Average) and 0.6826 (Daily Fibonacci 38.2%).

Today we get U.S. Fed Chairmen Jerome Powell who will be on the wires during the Australian time zone, ahead of RBA Governor Lowe tonight. Lowe is talking about “unconventional monetary policy – some lessons from overseas”, a speech that will be closely watched, with the topic of great interest at present. Tonight, we also see the release of trade, new home sales and consumer confidence data in the U.S.

Key Movers

A quiet night in the U.S. session overall for FX, with the US Dollar Index climbing higher on the back of reports that China is planning to raise penalties on intellectual property violations. Other than that, headlines were light with China summoning the U.S. Ambassador to complain about the recent Hong Kong Bill passed through the senate (yet to be signed officially by Trump). Market reaction to the downside was limited on the headline with U.S. equities outperforming and U.S. Treasury yields dipping.

Earlier on in the Europe Session, EURUSD continues to disappoint bulls and bears, with the French and German PMI’s a beat (although from very low levels), but the Eurozone services a miss. This saw price action briefly rally and reach the highs on the day, with the rally topping out at 1.1030, sitting now at 1.1010. 1.0990 for now remains short term support and if we close below 1.1000 on the break of it, we may see further follow through on a USD flow driven month end.

New ECB president Christine Lagarde spoke at the end of last week, with nothing market moving, and we have more speakers this week in form of ECB’s Philip lane, Yves Mersch, Benoît Coeure as well as U.S. Fed’s Chairmen Jerome Powell and Lael Brainard.

Expected Ranges

AUD/USD: 0.6750 – 0.6810 ▼

AUD/EUR: 0.6125 – 0.6165 ▼

GBP/AUD: 1.8975 – 1.9085 ▲

AUD/NZD: 1.0535 – 1.0595 ▼

AUD/CAD: 0.9000 – 0.9085 ▼


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US-China Phase One Trade Talk Elevating Market Optimism

OFX Daily Market News

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USD – United States Dollar

A quiet day and overnight in the US session overall for currency pairs, with the US Dollar Index climbing higher on the back of reports that China is planning to raise penalties on intellectual property (IP) violations. WTI crude oil moves higher in trading to start the week from 57.22 to the current price of 58.13 a barrel. Optimism in the US-China trade saga with the introduction of Phase One seemingly imminent is also pushing gold lower over the past four trading sessions. Hopes of the deal between the two trading Titans rose after China said it was stepping up police intelligence efforts to combat IP theft. Intellectual Property (IP) has been a central focal point in the trade war treaty, so China’s efforts to step up security in this area is seen as a significant hurdle to overcome for a resolution. Risk was “on” for most of the day yesterday. US stocks rallied on the hopes for a US-China Phase One trade deal can be met before Dec 15th when new tariffs are expected to be raised. Other than that, headlines were light with China summoning the US Ambassador to complain about the recent Hong Kong bill passed through the senate (yet to be signed officially by Trump). Market reaction to the downside was limited on the headline with US equities outperforming and US Treasury yields dipping.
Lots of US economic data for market participants to digest today with Wholesale Inventories, Goods Trade Balance, Case-Shiller Home Price Index, Richmond Fed Manufacturing Index, New Home Sales M/M for October, and Consumer Confidence all released today.

Key Movers

Earlier on in the Europe Session, EURUSD continues to disappoint bulls and bears, with the French and German PMI’s a beat (although from deficient levels), but the Eurozone services a miss. This saw price action briefly rally and reach the highs on the day, with the rally topping out at 1.1030, sitting now at 1.1017. The 1.0990, for now, remains short term support, and if we close below 1.1000 on the break of it, we may see further follow through on a USD flow drive month-end pricing.
New ECB president Christine Lagarde spoke at the end of last week, with nothing market moving, and we have more speakers this week form the ECB’s Philip lane, Yves Mersch, Benoît Coeure as well as US Fed’s Chairmen Jerome Powell and Lael Brainard.

Expected Ranges

EUR/USD: 1.1007 – 1.1025 ▲

GBP/USD: 1.2850 – 1.2908 ▼

USD/CAD: 1.3300 – 1.3316 ▼

AUD/USD: 0.6767 – 0.6796 ▲

NZD/USD: 0.6405 – 0.6425 ▲


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Eyes on Lowe as RBA governor discusses unconventional monetary policy

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar remained firmly entrenched within recent ranges throughout Friday struggling to foster a meaningful break as market and investor convictions faltered in the face of trade uncertainty. With little headline macroeconomic data on hand to drive direction and monetary policy forward guidance largely priced in attentions remained squarely affixed to US-China headlines as a driver of two-way risk.

The trade tiff will continue to hold centre stage as we move into a new week with trade war headlines dominating broader direction. While key negotiators have hinted a phase one deal is very close to being signed, last week Senate bill supporting the Hong Kong protesters raises concerns underlying ideological differences will prevent an agreement being reached. We expect trade related risk to drive range bound direction forcing the AUD to bounce between support 0.6760 and resistance at 0.6830 in the lead up to key commentary from RBA Governor Lowe and Deputy Governor Debelle. In a highly anticipated address Governor Lowe is set to discuss unconventional monetary policy. With interest rates already at record lows and another rate cut forecast for February markets will be keenly attuned for any signal the RBA is moving toward unconventional measures of stimulus. A dovish undertone will likely see the AUD test supports and could prompt a break back toward 0.67 and 0.6680.

Key Movers

Price action for USD this week will be hampered by Thursday Thanksgiving holiday and long weekend. While the back and forth between trade delegates drives direction we could see some increased volatility in thin trading lines come the end of the week, especially if key inflation date due Wednesday misses the mark. Watch for fluctuation in USD/JPY on the back of risk trends.

Sterling remains beholden to election and subsequent Brexit outcomes, finding support through the end of last week as Johnson’s conservative look further cement their lead in the polls. Opening this morning just below 1.29 we anticipate the GBP will fluctuate between 1.27 and 1.31 in the lead up to the December 12th election.

The Euro could test the lower end of recent ranges this week having missed on key manufacturing PMI data last week. With little offered from new ECB head Christine Lagarde in her maiden address we can only expect the ECB will maintain it current path of QE and accommodative monetary policy as concerns lacklustre growth and stagnant inflation will require persistent and ongoing stimulus. A break below the psychological 1.10 mark could signal a downturn and move toward 1.0950.

Expected Ranges

AUD/USD: 0.6760 – 0.6830 ▼

AUD/EUR: 0.6130 – 0.6190 ▲

GBP/AUD: 1.8850 – 1.9150 ▼

AUD/NZD: 1.0550 – 1.0650 ▼

AUD/CAD: 0.8960 – 0.9065 ▼


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Australian Dollar reverse gains opening at one-week lows

OFX Daily Market News

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AUD – Australian Dollar

In the absence of any local data on Thursday the Aussie flirted within a 30-pip range against the Greenback and struggled to hold on to small gains above the 68c mark. Worth noting risk sentiment has deteriorated in the past 24-48 hours as the U.S senate passed two bills to back protesters in Hong Kong which has angered China and crushed any hopes of a partial trade deal between the two countries that have been at war from months.

Looking ahead, locally we see the release of Flash Manufacturing and Flash Services PMI and with the US-China trade war still front and centre we could see limited upside for the pair as the Aussie is highly leveraged to the Chinese economy. From a technical perspective, we see initial support at 0.6770 followed by 0.6720, on the flip side, strong resistance is sitting at 0.6830.

Key Movers

Sterling is lower on the back of a stronger US dollar across the board, the GBP/USD has reversed all gains from earlier on in the week and has dropped from 1.2969 to 1.2904. The Euro is another currency that relinquished all gains falling from 1.1097 down to 1.1052 following the ECB Monetary Policy Meeting Accounts. European Central Bank’s Luis de Guindos comments were interpreted that a cut to deposit rate is still on the cards next year.

Meanwhile, in the US we saw a few macro releases, the Philadelphia Fed survey picked up a little in November rising to 10.4 from 5.6 in October which was well above market expectations. Also, the number of Americans claiming unemployment benefits were flat at 227k for the week, these numbers are still sitting at five-month highs.

Expected Ranges

AUD/USD: 0.6720 – 0.6830 ▼

AUD/EUR: 0.6000 – 0.6160 ▼

GBP/AUD: 1.8900 – 1.9180 ▲

AUD/NZD: 1.0550 – 1.0660 ▲

AUD/CAD: 0.8960 – 0.9070 ▼


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U.S.-China Trade Saga Continues.

OFX Daily Market News

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USD – United States Dollar

The U.S.-China saga continued on Thursday after U.S. negotiators attempted to reach a Phase 1 deal with their Chinese counterparts once again. However, talks are expected to break down once again. The Hong Kong Human Rights and Democracy act has been passed to President Trump, and despite China demanding Trump veto the deal, this looks unlikely.
Yesterday we saw the Philadelphia Fed survey picked up a little in November rising to 10.4 from 5.6 in October, which was well above market expectations. Also, the number of Americans claiming unemployment benefits were flat at 227k for the week; these numbers are still sitting at five-month highs.
WTI crude oil slipped, sending the greenback lower against it commodity-based currency peers as draws on U.S. inventories were less than expected, and trade deal optimism being priced in. WTI is moving lower again down -0.20 percent to 58.45 a barrel.

Key Movers

Today marks a big day for the Euro as Christine Legarde is scheduled to make a speech, and November PMI’s are released. Since made President of ECB, Lagarde has remained relatively quiet on monetary policy. However, much like her predecessor, she feels as though the fiscal stimulus is necessary to combat the global recession and sustain the region’s economy. The key take away will be her thoughts on budgetary stimulus going forward. We should see a response from the Euro dependent on her tone. A dovish tone should send the Euro tumbling towards the EUR/USD 1.10 handle. However, a more optimistic view should send EUR/USD on a rally towards 1.11. Germany posted better than expected GDP numbers yesterday, and therefore her tone may resemble the boost.

Expected Ranges

EUR/USD: 1.1047 – 1.1087 ▼

GBP/USD: 1.2850 – 1.2928 ▼

USD/CAD: 1.3245 – 1.3300 ▼

AUD/USD: 0.6783 – 0.6803 ▲

NZD/USD: 0.6399 – 0.6425 ▲


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The Greenback receives mixed signals from manufacturing and employment data.

OFX Daily Market News

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USD – United States Dollar

This morning, there was good and bad news for the Greenback, making the U.S. dollar trade sideways. The USD/EUR is falling 0.1 percent, and the USD/CAD is rising 0.10 percent. The good news came from the Philly Fed Manufacturing index, which came in at 10.4 versus an expected number of 7. According to the Federal Reserve Bank of Philadelphia, Manufacturing activity in the region continued to grow, the survey’s broad indicators remained positive, and the indicator for general activity increased. This suggests continued optimism about growth for the next six months.

At the same time, the bad news came from unemployment claims number, where the advance figure for seasonally adjusted initial claims came in at 227,000 for the week ending on November 16th. There was no change compared with the previous week’s revised level; however, the last week’s level was revised up by 2,000 from 225,000 to 227,000. It is usually unfavorable for the currency when the number is more than the forecast.

Key Movers

According to Bloomberg, British opposition Labour Party leader, Jeremy Corbyn, will unveil an election manifesto today promising radical changes across the economy, with, “…bankers, billionaires and the establishment” targeted. However, the GBP/USD pair rises in spite of this news, because market participants still only see a conservative victory coming from the December 12th vote.

The ECB monetary policy meeting account was released this morning, which, in summary, resulted in officials agreeing to stay put at the Oct 23-24 meeting, which was Mario Draghi’s last time as ECB President. It seems that the stimulus package disclosed a month earlier is a work in progress for the European economy. Regarding the European economic outlook, officials noted that incoming data left questions as to whether the Euro Zone’s economic weakness would last even longer than expected. The EUR/USD touched a low of 1.0989 on November 14th, but it reached an intraday high of 1.109 only two hours ago.

Expected Ranges

EUR/USD: 1.1070 – 1.1097 ▼

GBP/USD: 1.2915 – 1.2971 ▼

USD/CAD: 1.3269 – 1.3325 ▼

AUD/USD: 0.8544 – 08574 ▼


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