Daily Forex Commentary

25 September 2017 - Aussie little changed hovering under 80c

By Sai Muthen

New Zealand Dollar:

 

The New Zealand Dollar enjoyed mixed fortunes through trade on Friday edging lower throughout the domestic session as uncertainty surrounding the weekends election led to short term profit taking and repositioning. Touching intraday lows at 0.7275 the NZD then rallied into the close, buoyed by risk off trade and wider USD weakness following a dismantling of risk appetite in the wake of comments from North Korea’s foreign minister. Escalating tensions between the rogue State and the US forced a selloff in U.S yields and the worlds base currency enabling the NZD to move back through 0.73 and touch 0.7345. As attentions turn now to the election result there is some scope for an uptick with the prospect of looser fiscal policy and increased government spending likely to drive inflation and force RBNZ activity sooner than expected.

 

We expect a range of 0.7220 – 0.7440

 

Australian Dollar:

 

The Australian Dollar opened weaker this morning when valued against the Greenback. After losing nearly 100 pips on Thursday the AUD/USD pair was able to stage a modest recovery on Friday but failed to extend its gains above the 0.80 mark. The Aussie closed the week lower at around 0.7960 down for a second consecutive week. In the absence of any market-moving economic data this week the Aussie dollar is likely to be driven by investor sentiment. The AUD/USD pair is currently trading at 0.7952. We now expect support to hold on moves approaching 0.7910 while any upward push will likely meet resistance around 0.7990.

 

We expect a range of 0.7850 – 0.8075

 

Great British Pound:

 

Great British Pound positive movements this week after a stronger retail sales print were quickly erased on Friday evening following the latest release of Prime Minister May’s Brexit Strategies. Cable opened the day at 1.3580 with CBI Industrial order expectations growing, albeit at a slower rate with the news having little impact on the local currency. Sterling was then the weakest of the major currencies, closing the week lower after May delivered they would honour its financial commitments to the EU but provided little new detail to the markets. Investors sold off the Sterling by 0.6% and touched a low of 1.3445 before rebounding slightly on close. Cable opens this morning at 1.3490 and is higher against the Australian dollar - 1.6960 and lower against the Kiwi – 1.8440.

 

We expect a range of 1.8400 – 1.8675

 

Majors:

 

Strong Eurozone Flash Services and Flash Manufacturing data on Friday took the EUR/USD back up towards the 1.2 handle, the data signals growth in the economy registering a four-month high on the Services side and almost a six and a half year high for Manufacturing. With no major economic releases from out of the United States, markets attention has continued on the Fed and the possibility of seeing three rates hikes which saw the pair retrace back to 1.1910. Looking ahead, Germany will be releasing its IFO Business Climate Survey and the ECB’s President is due to testify before the European Parliament Economic and Monetary Affairs Committee. On the technical front, support lies at 1.1900 followed by 1.1860 with the pair seeing resistance at 1.1965, followed by 1.2000.

 

AUD:

No Data

NZD:

No Data 

JPY:

Flash Manufacturing PMI; BOJ Gov Kuroda Speaks

GBP:

FPC Statement

EUR:

German IFO Business Climate; ECB President Draghi speaks

USD:

FOMC Member Dudley Speaks; FOMC Member Evans Speaks

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