Jim Devonport
Compass Global Markets
Daily Currency Market Report – 29th July 2014
The market in brief:
• AUD and NZD in tight ranges waiting for major event risks
• US Pending Home Sales fall sharply
• Geopolitical tensions remain
Market moving events for the next 24 hours:
• Australian New Home sales
• US Consumer Confidence
AUDUSD:
The Australian Dollar was held in a tight 30 point range all session, closing near its highs. US Pending Home Sales disappointed and gave the AUID the nudge higher; however we are really waiting for any further escalation in tensions between Russia and the EU, as well as goings on in the Middle East. As for the economic calendar our focus will turn to the US and release of GDP, the Federal Reserve’s FOMC meet and Non-Farm Payrolls. The later part of the week therefore promises to have a whip in its tail and those preferring not to gamble on a currency that could easily be 21 cents higher or lower should give us a call today.
AUDEUR:
A tight range for this pair also as the market looks towards the EU and how it will handle the issues in Russia. There are no real economic releases to write home about until tomorrow evenings German inflation print, so until then we see another stable and quiet session ahead but with action set to come later in the week.
AUDGBP:
The Pound gave us some small ground overnight and saw the Aussie push to the top of the downward channel. As with most economies, there is no data released of note until the tail end of the week, so we will see the technical’s come into play and therefore a break through resistance levels for higher ground.
AUDNZD:
The Tasman cross has flat-lined having hit psychological resistance, but is still 70 points shy of our technical resistance target that we set back in June. Fonterra is expected to announce a lower forecast payout for the 2014/15 season this afternoon, in response to falling global dairy prices, so should see the Kiwi weaken. The resultant push higher will depend on the payout reduction that should be down from $7 to $6.50 or even $6. The announcement should then see a break and test of our target level.
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