Daily currency market report

Daily Currency Market Report – 1st August July 2014


The market in brief:
• AUD pushes lower still
• NZD down for the 6th session in a row
• Australian Building Approvals collapse
• Australian Import Prices fall
• UK House Prices up again
• EU inflation weaker than expected
• US Weekly Unemployment Claims up
• US Chicago PMI much weaker

Market moving events for the next 24 hours:
• Chinese Manufacturing
• Australia PPI
• UK PMI
• US Non-Farm Employment Change
• US Unemployment Rate
• US Manufacturing





AUDUSD:
The Australian Dollar spent another day on the back foot, dropping to fresh 8 week lows. Dire domestic Building Approvals and lower import prices weighed on the currency; however there was some respite as the US produced two poor economic releases of its own. Today’s focus is on Australian Producer Prices, Chinese Manufacturing and the all-important Non-Farm Payrolls from the States. Thoughts are that the Chinese figures will be good and that the NFP will be worse. Therefore given the large sell off we have seen over the course of the week, we favour the Aussie to be bid and an up day ahead of the weekend. Exporters get in quick. Importers give us a call to discuss where to put your target orders.

AUDEUR:
The lack of follow through to EU sanctions on their Russian neighbours, along with some weaker data domestically has seen this pair push lower again. Spanish and Italian Manufacturing data is released this evening and will be of some passing interest, however we feel the writing is on the wall and we are headed back to the yearlong trend line resistance that now acts as support. With the AUD so much weaker across the board we can’t see much more in the way of downside here and suggest exporters get ready to jump in with at least 1 if not both feet. Importers hold fire and look for a recovery as the downward channel gets ready to resume.

AUDGBP:
With inflation in the form of higher UK house prices ticking along nicely, the Pound has strengthened again. UK Manufacturing data is due this evening and appears set to continue in its expansive phase. On the charts we are firmly in a downward channel and heading to the bottom of that. Short term importers may want to get on board now, exporters (or other GBP sellers) may want to wait till the latter part of next week or a target that sits 70 points below.

AUDNZD:
Unsurprisingly the Tasman Cross has pushed another 50 points lower. The weaker Australian data and lack of anything meaningful from NZ resulted in more sellers than buyers! Technically of course the upward channel is playing out to perfection. This suggests that we may have another NZD 2 cents to go, although fundamentally that appears to be a tad too far. Either way the channel should be respected and orders placed accordingly.

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