Daily Currency Update
Following weak jobs data from Australia that caused a drop below 0.6900, the AUD/USD eked out a little gain through the middle of North American trading on Friday. On Friday, things changed slightly since the AUD/USD made some gains while the USD matched its earlier advances. Indicators of a drop-off in existing home sales in the US by 1.5% are providing a glimpse into the difficulties buyers are facing as a result of high-interest rates and limited supply. On that note, Federal Reserve President Patrick Harker entertained the possibility of an interest rate downshift at the next release, mentioning that 25 basis point hikes will be sufficient moving forward. However, other Federal Reserve presidents do not share this, with KansaCiti Federal Reserve President stating that they must be patient and await inflation effects in the services sector. Overall, Friday was a positive day for the Australian dollar with the AUD/USD exchange rate closing out the day at 0.69670, posting an overall gain of 0.83%.
Key Movers
Improved risk sentiment helped lift commodity currencies through trade on Friday following a stronger than anticipated string of earnings data from Key US corporates. Earnings across the Tech sector helped fuel a rebound in equities while commentary from Fed speakers helped affirm expectations policymakers will slow the pace of rate hikes next week. The Fed is expected to issue a 25 point increase, pulling back from the 50 point hike issued in December as data sets suggest a slowdown in activity and shift toward economic recession. With the AUD, NZD, and CAD leading gains into the weekly close the Euro and GBP looked to consolidate gains with the Euro closing above 1.0850 while Sterling looks poised to test a break above 1.24. In other news the Japanese yen was the day’s worst performer, offering some support to the dollar index as it gave up 129 and allowed the USD to climb back above129.50 leading into the weekly close/ CPI data surged upward, marking 4% y/y, a fresh 40 year high. While the BoJ insists inflation is transitory there is mounting pressure to move away from expansionary policy and give up yield curve controls. With little of note on today’s macroeconomic ticket, our focus this week shifts to US advanced GDP data and the PCE index, as key measures of performance and inflation ahead of next week’s Fed policy update.
Expected Ranges
- AUD/USD: 0.6905 – 0.6970 ▲
- AUD/EUR: 1.5698 – 1.5569 ▲
- GBP/AUD: 1.7770 – 1.7930 ▼
- AUD/NZD: 1.0750 – 1.0800 ▼
- AUD/CAD: 0.9295 – 0.9350 ▲
IMPORTANT: This information has been prepared for distribution over the internet and without taking into account the investment objectives, financial situation and particular needs of any particular person. Oz Forex Foreign Exchange makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites. Please read our Product Disclosure Statement and our Financial Services Guide.
Regulated in Australia by ASIC (AFS Licence number 226 484)
© 2010 Copyright Oz Forex Foreign Exchange Pty Ltd ABN 65 092-375-703
OzForex Foreign Exchange Services
Member of FOS (Financial Ombudsman Service)
Full Member of AFMA (Australian Financial Markets Association)
Recommended Content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.