Jim Devonport
Compass Global Markets
DailyCurrency Market Report – 9th July 2014
The marketin brief:
· Aussie andKiwi Dollars continue recovery
· Australian BusinessConfidence picks up
· Fitchupgrades NZ credit rating
· UKManufacturing drops
· US FedReserve comments and falling bond yields keep US Dollar on the back foot
Marketmoving events for the next 24 hours:
· Australian ConsumerSentiment
· Chineseinflation
· US FedReserve FOMC minutes
· ECBPresident Draghi speaks
AUDUSD:
The Australian Dollar continued its recovery from the selloff oflast week. Domestic Business Confidence started the ball rolling, howeverreports that buying of long data US Treasury bonds and comments from the Fed’s Kocherlakotastating that they should not raise interest rates until 1-2year outlook forinflation is 2% has also kept the US Dollar on the back foot. We continue to favour the upside with our immediate target at levels we traded at prior to the RBA comments of last week that sit 75 points above.
AUDEUR:
The Australian Dollar has marched higher here as well, trading athighs seen last week and looking to test further upside once again. Focus willbe on a speech by ECB President Draghi first thing tomorrow morning, so untilthen we should see recent highs cap. Any disappointment from local or Chinese datamay give the exporters a chance, but it only briefly.
AUDGBP:
A surprisingly shocking manufacturing data read from the UK pushedthe Pound lower again. Analysts expectations were for a read of +0.4%, howeverthe actual -1.3% was the worst release since March of last year. Halifax HousePrice Index data is due this evening, however it’s the Bank of England meetingtomorrow that has our attention so we see the range being held for now.
AUDNZD:
The Tasman Cross had another volatile session as Australian datawas matched by comments from credit ratings agency Fitch who revised itsoutlook on New Zealand's sovereign rating to 'positive' from 'stable'. Fitchmentioned fiscal consolidation is strengthening the resilience of NZ's creditprofile; however they warned high external debt, commodity dependence, andexposures to China and Australia created vulnerabilities. Looking ahead and direction will be determined by Australian and Chinee fundamentals atht should see the general upward channel maintained.
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Jim DevonportCorporate & High Net Worth Client ManagerSydney | Melbourne | Perth | Auckland | Zhuhai Mobile: +61 415 066 468 Phone: +61 2 9283 9792 Direct: +61 2 8039 1485Aust Free: 1300 BEST FX (2378 39) Address: Suite 33, Level 3World Square, 650 George St, Sydney NSW 2000, Australiawww.compassmarkets.com
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