AUD/USD little changed despite rising US equities

OzForex Research OzForex Foreign Exchange

Daily Currency Update

Thursday’s session the Australian dollar trade sideways against its US counterpart, oscillating between 0.7085 and 0.7115 throughout trade. It was a similar story for the NZD which traded between 0.6800 and 0.6830, seeing the AUD/NZD cross rate slip slightly from 1.0440 to 1.0408. This currency market calmness was in contrast to rising US equities, with the S&P500 index rising 1.5% and bond yields also slightly higher. Today we have a raft of PMI’s due out. Firstly out of Japan which is expected to show some post-Delta improvements, a robust report is also expected out of China’s Caixin Services PMI, and lastly, we get Markit Services PMI’s for the Eurozone and the UK. We will also get retail sales data for Europe before focus shifts to the key risk event for the day in the form of US non-farm payrolls. On the technical front, AUD/USD is still a victim of negative momentum, approaching supports at 0.7065.

Key Movers

As we touched on above, after a volatile few sessions, moves in currency markets have been quite restrained overnight despite the sharp rise in US equities. We’re expecting markets to remain volatile given the uncertainty surrounding the Omicron variant and its associated risks to growth and global mobility. In commodities, we saw crude oil futures rising 0.9% to just under $70, copper rose over 1% and gold and iron ore both fell 1% and 2.5% respectively. Iron ore is now trading at $100.

Expected Ranges

AUD/USD: 0.7060 – 0.7120 ▼
AUD/EUR: 0.6220 – 0.6320 ▼
GBP/AUD: 1.8680 – 1.8800 ▲
AUD/NZD: 1.0385 – 1.0430 ▼
AUD/CAD: 0.9000 – 0.9115 ▼

Author

OzForex Research

OzForex Foreign Exchange

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.