GO Markets Forex Team
GO Markets
Despite relative stability across global markets overnight, the Australian dollar has continued its slide in the domestic session. The local unit’s correlation with commodity markets appears to be back on again courtesy of renewed concerns about China’s economic stability.
Monday’s less than inspiring PMI numbers out of China appears to be having a sustained effect, amid a weakening Yuan which is generally seen as a reflection of confidence in the economy. Notwithstanding the Peoples Bank of China’s ability to control its currency rate, outflows from the region, and the growing discrepancy between onshore and offshore RMB currency values, would suggests confidence is sliding. History shows this is a pretty good directive for the currencies highly reliant on demand from China.
At the time of writing the AUD is trading precariously above 71 US cents amid broad based USD strength across the board. Once again the exception is the Yen with the USDJPY pair sliding each of the three sessions of 2016.
Coming up the US this evening will be a few data points which may promote a bit of movement ahead of Friday’s official employment data. Certainly the ADP Employment gauge is seen as a precursor to NFP’s and the FOMC minutes will be closely watched. The minutes may reveal a little more about the Fed’s view of the year ahead. While we know the Fed plans to gradually increase rates and their projections suggest around 4 rate hikes over the year, markets need constant reassurance and will react to any titbits of information that confirms of contradicts expectations.
Risk Warning: Trading Forex and Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. The FSG and PDS for these products is available from GO Markets Pty Ltd and should be considered before deciding to enter into any Derivative transactions. AFSL 254963. ABN 85 081 864 039.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.