Weekly Market Watch

Released 20 June 2016 - AUD Weekly Market Watch

Last week recap

Gained a fraction last week as U.S. economic numbers were mixed, the Fed left interest rates unchanged and with very little significant economic data out of the Eurozone. The week began on a positive note, with the rate making its weekly high of 1.1302 on Monday after comments from German Bundesbank president Jens Weidmann, who stated that “our definition of price stability requires that the inflation rate target is achieved in the medium term.” As a result, “that gives us enough time to wait for the effects of the agreed monetary policy measures on price developments.” The rate declined on Tuesday after German bond yields sank to a negative number for the first time ever on safe haven asset flows. Also pressuring the pair were U.S. Retail Sales, which increased +0.5% m/m compared to an expectation of +0.4%, while Core Retail Sales increased +0.4%, in line with expectations. Also out were U.S. Import Prices, which increased +1.4% m/m versus a consensus of +0.8%. The pair then rebounded on Wednesday after the Fed left the benchmark Fed Funds Rate at <0.50% as="" was="" widely="" anticipated.="" in="" the="" fed’s="" rate="" statement,="" the="" central="" bank="" noted="" that,="" “the="" committee="" expects="" that="" economic="" conditions="" will="" evolve="" in="" a="" manner="" that="" will="" warrant="" only="" gradual="" increases="" in="" the="" federal="" funds="" rate;="" the="" federal="" funds="" rate="" is="" likely="" to="" remain,="" for="" some="" time,="" below="" levels="" that="" are="" expected="" to="" prevail="" in="" the="" longer="" run.="" however,="" the="" actual="" path="" of="" the="" federal="" funds="" rate="" will="" depend="" on="" the="" economic="" outlook="" as="" informed="" by="" incoming="" data.”="" after="" the="" rate="" release,="" fed="" chair="" janet="" yellen="" told="" a="" press="" conference="" that,="" “we="" do="" need="" to="" make="" sure="" that="" there="" is="" sufficient="" momentum="" (in="" order="" to="" raise="" rates).="" i="" don't="" know="" what="" the="" timetable="" is="" going="" to="" be="" to="" gain="" that="" assurance.="" every="" meeting="" is="" live.="" there="" is="" no="" meeting="" that="" is="" off="" the="" table.="" no="" meeting="" is="" out="" in="" terms="" of="" a="" possible="" rate="" increase.”="" thursday="" saw="" the="" pair="" make="" its="" weekly="" low="" of="" 1.1130="" after="" eurozone="" final="" cpi="" declined="" -0.1%="" y/y="" as="" was="" widely="" expected.="" u.s.="" data="" had="" core="" cpi="" increase="" +0.2%="" m/m="" as="" widely="" expected="" and="" cpi,="" which="" increased="" +0.2%="" m/m="" versus="" +0.3%="" expected,="" also,="" the="" philly="" fed="" manufacturing="" index="" printed="" at="" +4.7,="" significantly="" higher="" than="" the="" expected="" reading="" of="" +1.1,="" while="" initial="" jobless="" claims="" increased="" to="" 277k="" versus="" 267k="" expected.="" the="" pair="" then="" gained="" on="" friday="" after="" u.s.="" building="" permits="" increased="" an="" annualized="" 1.14m,="" while="" housing="" starts="" increased="" +1.16m,="" both="" in="" line="" with="" expectations.="" also="" on="" friday,="" ecb="" president="" draghi="" stated="" that,="" “we="" have="" seen="" that="" the="" price="" of="" inaction="" is="" high.="" we="" have="" seen="" how="" it="" leaves="" the="" economy="" vulnerable="" to="" instability.="" we="" have="" seen="" how="" the="" perceived="" impotence="" of="" public="" authorities="" in="" meeting="" the="" needs="" of="" their="" people="" feeds="" into="" frustration="" and="" rejection.="" and="" we="" have="" seen="" how="" that="" risks="" undermining="" trust="" in="" and="" support="" for="" our="" institutions="" –="" and="" even="" the="" european="" union="" itself.”="" eur/usd="" closed="" at="" 1.1273,="" with="" an="" overall="" gain="" of="" just="" +0.2%="" from="" its="" previous="" weekly="" close.="">
Fell sharply last week as the Japanese Yen was supported by the BOJ’s leaving monetary policy unchanged, while the Fed also left interest rates unchanged. The rate began the week making its weekly high of 106.93 on Monday in the absence of any significant data out of either country. Tuesday saw the pair lose a fraction despite better than expected U.S. Retail Sales data. The rate consolidated at a slightly lower level on Wednesday as the Fed left the Fed Funds rate unchanged at <0.50%. the="" pair="" then="" fell="" sharply="" on="" thursday,="" making="" its="" weekly="" low="" of="" 103.54="" after="" the="" boj’s="" monetary="" policy="" statement="" showed="" the="" policy="" board="" had="" maintained="" annual="" monetary="" base="" expansion="" at="" 80t="" jpy="" by="" a="" vote="" of="" 8-1,="" while="" the="" interest="" rate="" was="" held="" at="" -0.1%="" by="" a="" 7-2="" vote.="" the="" bank’s="" statement="" noted="" that,="" “japans="" economy="" has="" continued="" its="" moderate="" recovery="" trend,="" although="" exports="" and="" production="" have="" been="" sluggish="" due="" mainly="" to="" the="" effects="" of="" the="" slowdown="" in="" emerging="" economies.="" overseas="" economies="" have="" continued="" to="" grow="" at="" a="" moderate="" pace,="" but="" the="" pace="" of="" growth="" has="" somewhat="" decelerated="" mainly="" in="" emerging="" economies.”="" after="" the="" rate="" release,="" boj="" governor="" kuroda="" told="" a="" press="" conference="" that,="" “a="" rise="" in="" volatility="" or="" a="" rise="" in="" the="" yen="" that="" doesn’t="" reflect="" economic="" fundamentals="" would="" be="" undesirable="" so="" we’re="" closely="" watching="" movements="" in="" international="" markets,="" including="" the="" exchange="" rate.”="" the="" pair="" then="" lost="" a="" fraction="" on="" friday="" bringing="" the="" rate="" to="" close="" at="" 104.11,="" with="" an="" overall="" loss="" of="" -2.6%="" for="" the="" week.="">
Gained ground last week as the BOE left interest rates and stimulus measures unchanged, while the U.S. Federal Reserve also left interest rates unchanged. The week began with Cable declining a fraction on Friday in the absence of any significant economic data out of either country. The rate extended its losses on Tuesday after UK CPI increased +0.3% y/y compared to an expected +0.4%. Also out were UK PPI Input, which increased +2.6% m/m, significantly higher than the +0.9% increase that was expected, and RPI, which rose +1.4% y/y compared to an expectation of +1.5%. Wednesday saw Cable reverse direction, rallying after the UK Average Earnings Index increased +2.0% 3m/y versus +1.7% expected, while Claimant Count Change fell -0.4K compared to an expectation of -0.1K with the previous number significantly revised up from -2.4K to +6.4K, nevertheless, the UK Unemployment Rate fell to 5.0% from 5.1%. Thursday saw Cable make its weekly low of 1.4011 before ending with a fractional gain for the session after the BOE left the Official Bank Rate and Asset Purchase Facility at 0.50% and 375B respectively, both, by unanimous MPC votes. The BOE’s Monetary Policy Summary noted that, “On the evidence of the recent behaviour of the foreign exchange market, it appears increasingly likely that, were the UK to vote to leave the EU, sterling’s exchange rate would fall further, perhaps sharply. This would be consistent with changes to the fundamentals underpinning the exchange rate, including worsening terms of trade, lower productivity, and higher risk premia. In addition, UK short-term interest rates and measures of UK bank funding costs appear to have been materially influenced by opinion polls about the referendum.” Thursday’s UK economic data had Retail Sales, which showed an increase of +0.9% m/m compared to an expectation of +0.3%. The rate continued appreciating on Friday as polls leaned towards the “remain” camp as the June 23rd referendum date closes in. GBP/USD closed at 1.4353, with an overall weekly gain of +0.8%.
Continued treading water last week as the FOMC left rates unchanged with very little economic data out of Australia. The week began on a quiet note, with the pair gaining a fraction on Monday as Australia observed a bank holiday with no significant data out of the United States. The rate lost ground on Tuesday after Australian NAB Business Confidence printed at 3 compared to a previous reading of 5. On Wednesday, the pair made its weekly high of 0.7445 after the FOMC left the Fed Funds Rate unchanged at 0.50%. The rate then made its weekly low of 0.7284 on Thursday despite Australian Employment Change, which showed an increase of +17.9K versus an expectation of +14.9K, while the Australian Unemployment Rate held steady at 5.7%. The pair gained a fraction on Friday as the United States reported two housing numbers in line with expectations. AUD/USD went on to close at 0.7390, with an overall gain of +0.2% from its previous weekly close.
Reversed direction, gaining ground last week as the price of crude oil closed just under $46 per barrel and with mixed economic numbers out of both countries. The week began with the pair making its weekly low of 1.2748 on Monday in the absence of any significant economic numbers from either country. The rate continued gaining on Tuesday after positive U.S. Retail Sales data. On Wednesday, the pair extended its gains as the FOMC left the Fed Funds Rate unchanged at 0.50% and Canadian Manufacturing Sales, which showed an increase of +1.0% m/m compared to an expected +0.7%. Thursday saw the rate make its weekly high of 1.3084 as the price of crude oil slipped under $48 per barrel and Canadian Foreign Securities Purchases showed 15.52B compared to an expected 14.70B. The rate then sold off on Friday despite Canadian CPI, which increased +0.4% m/m compared to +0.5% expected, while Core CPI increase +0.3% as widely anticipated. USD/CAD closed at 1.2891, with an overall gain of +0.9% for the week.
Showed little change last week as the U.S. Fed left rates unchanged with mixed economic numbers from both countries. The rate began the week gaining a fraction on Monday in the absence of any significant data out of either country. The pair then fell sharply on Tuesday despite the New Zealand Current Account showing a surplus of +1.31B compared to an expected +0.97B, nevertheless, the previous number was downwardly revised from -2.61B to -2.89B. The rate then recovered most of its losses on Wednesday after making its weekly low of 0.6961 after New Zealand GDP increased +0.7% q/q compared to an expectation of +0.5%, also, the New Zealand GDT Price Index printed at 0.0% compared to a previous reading of +3.4%. On Thursday, the pair made its weekly high of 0.7091 after the United States reported mixed economic data. The rate then consolidated at a slightly lower level on Friday, bringing NZD/USD to close at 0.7048, with an overall loss of just -6 pips and virtually unchanged on the week.

The week ahead

AUD The Australian economic calendar is light this coming week, only featuring a speech by RBA Assistant Governor Debelle, the RBA’s Monetary Policy Meeting Minutes and the HPI (0.80%) on Tuesday; followed on Thursday by another speech by RBA Assistant Governor Debelle. Resistance for AUD/USD is seen at 0.7718/22, 0.7547/92 and 0.7445/0.7503, with support noted at 0.7401, 0.7241/0.7368 and 0.7108/85.

CAD The Canadian economic calendar is rather quiet this coming week, only featuring Wholesale Sales (0.20%) on Monday, followed by Core Retail Sales (last -0.3%) and Retail Sales last -1%) on Wednesday. Resistance for USD/CAD is seen at 1.3217/95, 1.3145/87 and 1.2836/1.3084, while support shows at 1.2742/70, 1.2654/59 and 1.2592.

EUR The Eurozone economic calendar is quite active this coming week, featuring the tentatively scheduled German Constitutional Court Ruling that starts the week’s highlights off on Tuesday, along with the German ZEW Economic Sentiment survey (5.1) and the EZ ZEW Economic Sentiment survey (15.3). Wednesday then offers the tentatively scheduled Long Term Refinancing Option (last 7.3B) that may also come out on Thursday, while Thursday features French Flash Manufacturing PMI (48.8), French Flash Services PMI (51.5), German Flash Manufacturing PMI (52.1), German Flash Services PMI (55), EZ Flash Manufacturing PMI (51.4) and EZ Flash Services PMI (53.2). Friday’s important data then concludes the week with the German Ifo Business Climate survey (107.6). Resistance for EUR/USD is seen at 1.1615, 1.1415/1.1533 and 1.1341/84, with support showing at 1.1213/1.1244, 1.1127/79 and 1.1043/86.

GBP The UK economic calendar is rather sparse this coming week, only featuring Public Sector Net Borrowing (9.5B) on Tuesday and the closely watched Brexit EU Membership Vote on Thursday that is likely to create considerable volatility in the market. Resistance to the topside for GBP/USD shows at 1.4805/15, 1.4725/68 and 1.4637/69, while support for the pair is expected at 1.4529/1.4581, 1.4467/78 and 1.4205/1.4385.

JPY The Japanese economic calendar is peaceful this coming week, only featuring the Trade Balance (0.13T) on Monday and the BOJ’s Monetary Policy Meeting Minutes on Tuesday. Resistance for USD/JPY currently shows up at 107.25/89, 106.22/36 and 105.19/54, with support indicated at 104.12, 103.54/75 and 100.75/82.

NZD The New Zealand economic calendar is quiet this coming week, only featuring the Westpac Consumer Sentiment survey (106) on Sunday. The chart for NZD/USD shows resistance at 0.7230, 0.7145/86 and 0.7091. On the downside, technical support is expected at 0.7051/52, 0.6958/96 and 0.6805/95.

USD The U.S. economic calendar is moderately busy this coming week, featuring testimony by Fed Chair Yellen on Tuesday and Wednesday. Monday offers nothing notable, so Tuesday starts the week’s highlights off with testimony from Fed Chair Yellen. Wednesday then offers more testimony from Fed Chair Yellen, in addition to Existing Home Sales (5.53M) and Crude Oil Inventories (last -0.9M). Thursday features Weekly Initial Jobless Claims (271K) and New Home Sales (561K), while Friday’s important data then concludes the week with Core Durable Goods Orders (0.10%), Durable Goods Orders (last -0.8%) and the Revised University of Michigan Consumer Sentiment survey (94.2).


Currency Converter


Market Rate For information purposes only. Terms of Use
For details, see My FX Dashboard

For NZForex’s customer rate
Log In or Register Now
Rate: 0.7191
=
Rate: 1.3906
=

Open an account

Send money overseas at better rates than the banks.


Subscribe to commentary



RSS Follow Facebook

Set rate alerts

/
 
Choose currency pair and enter the exchange rate. An alert will be triggered when the exchange rate is reached and an email will be sent to you. You can unsubscribe any time and your email address is safe – see our Privacy Policy.

NOTE: These rates are for informational purposes only

© 2014 Copyright. This service is provided by NZForex Limited (CN: 2514293). NZForex is registered as a financial service provider under the Financial Service Providers (Registration and Dispute Resolution) Act 2008.
The information on this website does not take into account the investment objectives, financial situation or needs of any particular person. NZForex makes no recommendations as to the merits of any financial product referred to in this website.
Please read our Product Information document for a detailed explanation of the services we provide.
 
Ofx.com