Jim Devonport
Compass Global Markets
COMPASS DAILY CURRENCY MARKET REPORT 26TH NOVEMBER 2014
The market in brief:
• AUD opens at June 2010 lows
• NZD pulled lower
• NZ Inflation Expectations at 18 month lows
• RBA Asst Gov Lowe says economic struggles ahead
• US Consumer Confidence falls
• US GDP shows economy growing faster than forecast
• US equities at fresh highs
• Crude Oil down 2% at 74.35, Gold flat at $1,200
Market moving events for the next 24 hours:
• UK GDP
• US Durable Goods Orders
• US Weekly Unemployment Claims
• US New Home Sales
AUDUSD: The Australian Dollar looked heavy throughout Tuesday’s Asian session but was then sold off with a vengeance as RBA Assistant Governor Lowe toed the party line. His comments were that the economy “clearly has challenges ahead” and the Australian Dollar has more “adjustment lower to do”. This and much healthier US economy, that has had its fastest 2 quarters of growth in more than 10 years, took the Australian Dollar down to fresh multi year lows. We do have local Construction data today, but that is of medium importance only. Instead we’ll look to US numbers again to see if the growth is spreading over other sectors. On the charts we sit bang on the 50% retracement of the range of the rally seen from 0.60 cents of Nov’08 up to just shy of 1.11 of Jul’11. We expect that to hold for the rest of the week, given the lack of meaningful data to come and the US holiday on Friday.
AUDEUR:
The Euro has strengthened for the second straight day here as the market awaits confirmation of additional European Central Bank stimulus measures and as the Australian Dollar suffers across the board. There is no data due of note until tomorrow’s German inflation numbers, so with these lows being at technical support that has held since June, we’d expect that to continue for today at least.
AUDGBP:
Sterling has had a second day of gains here, despite UK Mortgage Approvals falling 16% and as UK inflation falters. UK GDP is released this evening along with the Confederation of British Industry’s Realised Sales data. Both are expected to be flat or weaker than expected. The charts would suggest that these lows hold as well given we tested support here 2 weeks ago and that was roundly rejected. Exporters????
AUDJPY:
A welcome dip for this pair as Tokyo market makers came back to their desks yesterday to bring some much needed volume to the Asian price action. Bank of Japan Governor Kuroda’s speech, saying that their 2% target will be achieved, was well received. We now look to the elections as the next major event for the Japanese economy. On the charts we are at support that acted as resistance and playing out one of yesterday’s forecast “shallow dips” for exporters.
AUDNZD:
The Tasman Cross has pushed lower despite NZ Inflation Expectations that pulled back to 2.06% from 2.3%. NZ Trade Balance data is due tomorrow so we cannot see any reason for further downside here just yet. Technically we are at the first level of support from the upward channel, however firm support sits 1 cent below further out.
Thought for today: “That the situation appears hopeless should not prevent us from doing our best”. Aldo Leopold
Alternative Currency Hedging: Ask us about a great alternative to traditional forward contracts that give the ability to cover at attractive levels, but with the flexibility to walk away if the rate improves or if not required.
Referrals: Client referrals are very important to our business. If you know of any contacts that can benefit from our comprehensive range of international currency transfer services, please do not hesitate to contact me. I’d be glad to assist.
Jim Devonport
The market in brief:
• AUD opens at June 2010 lows
• NZD pulled lower
• NZ Inflation Expectations at 18 month lows
• RBA Asst Gov Lowe says economic struggles ahead
• US Consumer Confidence falls
• US GDP shows economy growing faster than forecast
• US equities at fresh highs
• Crude Oil down 2% at 74.35, Gold flat at $1,200
Market moving events for the next 24 hours:
• UK GDP
• US Durable Goods Orders
• US Weekly Unemployment Claims
• US New Home Sales
AUDUSD: The Australian Dollar looked heavy throughout Tuesday’s Asian session but was then sold off with a vengeance as RBA Assistant Governor Lowe toed the party line. His comments were that the economy “clearly has challenges ahead” and the Australian Dollar has more “adjustment lower to do”. This and much healthier US economy, that has had its fastest 2 quarters of growth in more than 10 years, took the Australian Dollar down to fresh multi year lows. We do have local Construction data today, but that is of medium importance only. Instead we’ll look to US numbers again to see if the growth is spreading over other sectors. On the charts we sit bang on the 50% retracement of the range of the rally seen from 0.60 cents of Nov’08 up to just shy of 1.11 of Jul’11. We expect that to hold for the rest of the week, given the lack of meaningful data to come and the US holiday on Friday.
AUDEUR:
The Euro has strengthened for the second straight day here as the market awaits confirmation of additional European Central Bank stimulus measures and as the Australian Dollar suffers across the board. There is no data due of note until tomorrow’s German inflation numbers, so with these lows being at technical support that has held since June, we’d expect that to continue for today at least.
AUDGBP:
Sterling has had a second day of gains here, despite UK Mortgage Approvals falling 16% and as UK inflation falters. UK GDP is released this evening along with the Confederation of British Industry’s Realised Sales data. Both are expected to be flat or weaker than expected. The charts would suggest that these lows hold as well given we tested support here 2 weeks ago and that was roundly rejected. Exporters????
AUDJPY:
A welcome dip for this pair as Tokyo market makers came back to their desks yesterday to bring some much needed volume to the Asian price action. Bank of Japan Governor Kuroda’s speech, saying that their 2% target will be achieved, was well received. We now look to the elections as the next major event for the Japanese economy. On the charts we are at support that acted as resistance and playing out one of yesterday’s forecast “shallow dips” for exporters.
AUDNZD:
The Tasman Cross has pushed lower despite NZ Inflation Expectations that pulled back to 2.06% from 2.3%. NZ Trade Balance data is due tomorrow so we cannot see any reason for further downside here just yet. Technically we are at the first level of support from the upward channel, however firm support sits 1 cent below further out.
Thought for today: “That the situation appears hopeless should not prevent us from doing our best”. Aldo Leopold
Alternative Currency Hedging: Ask us about a great alternative to traditional forward contracts that give the ability to cover at attractive levels, but with the flexibility to walk away if the rate improves or if not required.
Referrals: Client referrals are very important to our business. If you know of any contacts that can benefit from our comprehensive range of international currency transfer services, please do not hesitate to contact me. I’d be glad to assist.
Jim Devonport
Corporate & High Net Worth Client Manager
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