|Day's Range||0.65 - 0.656|
|52 Week Range||0.6426 - 0.7437|
Brexit jitters hit the Pound, with Italy’s budget delivery to the EU later today weighing on the EUR, as risk aversion returns to the markets.
The risk off sentiment continued through the early part of the day, with better than expected trade data out of China doing little to settle the markets.
While the ECB monetary policy meeting minutes and Brexit will be eyed, U.S inflation figures could have a far greater influence this afternoon.
Having failed to clear immediate descending resistance-line, NZDUSD rests on 0.6460 support, breaking which it’s drop to 0.6420 can’t be denied. Should prices continue declining past-0.6420, the 61.8% FE level of 0.6390, followed by 2016 low around 0.6345, can please the Bears. On the contrary, uptick beyond 0.6490 TL may have to struggle with 0.6500 horizontal-barrier to aim for the 0.6540-45 and the 0.6570 resistances. However, pair’s rise after 0.6570 could find it hard to clear the 0.6590-0.6600 region, which if broken opens the door for its rally to 0.6630 & 0. ...
Traders will be watching the PPI data because it needs to justify the surge in Treasury yields. Lower than expected PPI could drive Treasury yields lower. This would give the AUD/USD and NZD/USD a strong boost.
Economic data out of Asia give the Aussie and Kiwi Dollars some respite early in the day, while geo-political risk remains the key area of focus.
Investing.com - The yuan fell on Tuesday while the U.S. dollar was largely unchanged as a senior U.S. Treasury official expressed concern at the fall in the Chinese currency, according to Bloomberg.
Traders shouldn’t read too much into the developing short-covering rally. It’s not likely to lead to any major change in trend. It is more likely to alleviate some of the downside pressure while setting up another shorting opportunity.
The Dollar could be in for another move should geo-political risks linger and trade war chatter out of China provide little comfort.
The Australian and New Zealand Dollars are inching higher early Monday on short-covering after early session weakness. U.S. Treasury markets are also closed. Additionally, U.S. Federal Reserve Chairman Jerome Powell fanned the flames for higher interest rates when he reiterated the central bank’s plan for gradual rate hikes through year end and beyond.
China service sector activity picks up as the PBoC announces a 4th cut in the RRR, while the Greenback sees more upside early on.
While the benchmark 10-year Treasury yield hit its highest level since 2011 on Friday, the U.S. Dollar Index was struggling. Perhaps this indicates a decoupling by the dollar and Treasury yields. If the run up in Treasury yields begins to level off then we can expect to see a weaker U.S. Dollar this week.
There are no major reports from Australia and New Zealand this week. In the U.S., investors will get the opportunity to react to Producer and Consumer Inflation data. The PPI is expected to show an increase of 0.2%, up from -0.1%. The CPI is forecast to show an increase of 0.2%, up from 0.1%
The early price action suggests we could see a counter-trend short-covering rally. It also indicates that the selling earlier in the week that drove the Aussie and Kiwi sharply lower may have been investors pricing today’s job market news into the market. In other words, today’s report became a sell the rumor, buy the fact event.
Consumer spending in both Australia and Japan improved but not by enough to shift sentiment as focus shifts to U.S labour market stats.
Investing.com - The U.S. dollar rose while the Japanese yen fell on Thursday following positive U.S. economic data.
The focus for traders at this time is the widening interest rate differential between U.S. Government bond yields and Australian and New Zealand Government bond yields. This move is also making the U.S. Dollar a more attractive investment.
The Dollar’s on a tear, only the Japanese Yen managing to hold on in the early hours, with a record trade surplus out of Australia doing little for the AUD.
Investing.com - The U.S. dollar rallied on Wednesday after higher-than-expected private sectors jobs data.U.S. private sector employers added 230,000 jobs in September, well above economists' expectations, a report by payrolls processor ADP showed on Thursday.Economists had expected the ADP nonfarm payrolls report to show a gain of 187,000 jobs.The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.13% to 95.25 as of 11:14 AM ET (15:14 GMT). ...
Having bounced off the 1.1535-25 support-zone, EURUSD needs to surpass the 50-day SMA level of 1.1605, followed by the 1.1645 hurdle, comprising 100-day SMA, in order to justify its strength in targeting the 1.1720 and the 1.1750 resistance-levels. However, the 1.1815-20 region could limit the pair’s upside past-1.1750, if not then 1.1900 and the 200-day SMA level of 1.1940 might please the buyers. Alternatively, a D1 close beneath the 1.1525 can quickly fetch the quote to 1.1430 and 1.1330 supports. Also, pair’s sustained decline below 1.1330 can avail 1. ...
The downtrend of the NZD/USD started in the middle of April and had been continuing until the middle of August. However, moves of the past recent weeks signal the forming of the horizontal channel. Does it mean that the NZD got chances to recover or it’s fake signs?
Driving the price action in the Australian Dollar today is the RBA’s interest rate decision. The central bank held its cash rate steady at 1.50 percent on Tuesday as widely expected. It also reiterated comfort with policy settings while noting weakness in the housing market as well as tighter credit conditions. In New Zealand, the Kiwi was being pressured by a report that showed business confidence sank to a nine-year low in the third quarter.
A mixed start to the day, the effects of the U.S – China trade war evident in the Chinese numbers, while the U.S economy powers ahead.
The AUD/USD and NZD/USD are likely to remain under pressure today as long as the focus remains on expectations of higher U.S. interest rates. Driving the price action at this time is the widening of the spread between U.S. Government bond yields and Australian and New Zealand Government bond yields. Investors are leaving the Aussie and Kiwi and chasing the higher U.S. yields.