The dollar is creeping higher once again this morning as it hit a new 12 month high overnight with the trend higher looking day by day to become more entrenched. The Aussie dollar has been one to suffer the most following last night’s RBA rate decision which saw the central bank keep it interest rate at an all-time low of 2.50% and maintain a dovish bias towards its currency. It has been consistently saying the Aussie is too strong and talking it down although little in the way of significant downside momentum has materialised over the long term. For the RBA at least they still have plenty more room to move interest rates lower, so they can at least match their words with action and they’ve been steadily lowering rates since November 2011. But when you compare that to the Eurozone, the topical subject of FX markets for this week, the talk from the ECB seems to be little more than just that. AUDUSD was quick to move back below the 0.9300 level and sits at 0.9290 at the time of writing with bears eying the near term support at 0.9270 and then 0.9240.
So to the Eurozone which saw yesterday manufacturing PMI surveys did little to help the prospects of the single currency. Italy in particular a focus since its economy recorded negative GDP growth for Q2 last week, saw its manufacturing survey dip back below the 50.0 level indicating contraction. Whilst in the near term there’s a chance of a bounce with some technical indicators having been signalling oversold for some time, the overarching trend for EURUSD remains downward and is hovering just above its recent lows at 1.3130.
A quick mention for sterling which is coming under a little pressure this morning following the most recent Scottish referendum poll which showed a significant narrowing of opinions, giving the Yes campaign a boost. GBPUSD has been heading lower as I write this now sitting at 1.6555 and will be one to keep an eye on as18th September approaches.
FxPro UK Limited is authorised and regulated by the Financial Services Authority, registration number 509956. CFDs are leveraged products that incur a high level of risk and it is possible to lose all your capital invested. Please ensure that you understand the risks involved and seek independent advice if necessary.
Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. FxPro does not take into account your personal investment objectives or financial situation. FxPro makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any employee of FxPro, a third party or otherwise. This material has not been prepared in accordance with legal requirements promoting the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of FxPro. This communication must not be reproduced or further distributed without the prior permission of FxPro. Risk Warning: CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all your invested capital. Therefore, CFDs may not be suitable for all investors. You should not risk more than you are prepared to lose. Before deciding to trade, please ensure you understand the risks involved and take into account your level of experience. Seek independent advice if necessary. FxPro Financial Services Ltd is authorised and regulated by the CySEC (licence no. 078/07) and FxPro UK Limited is authorised and regulated by the Financial Services Authority, Number 509956.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.