Market Overview by FiboGroup - 2014

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The Australian dollar hit another fresh four year low yesterday after a change of tone from the US Federal Reserve indicating that the central bank may lift interest rates in April of next year.

At 4.30pm (AEDT) the Australian dollar is trading at US81.32 cents after falling as low as US81.06 cents in yesterday’s trade.

Since the beginning of the year the Fed has taken the stance that rates will be on hold for "considerable time" after the end of their stimulus program they began several years back to kick start the economy.

They pointed to the employment market and Inflation by noting,

“if incoming information indicates faster progress toward the committee's employment and inflation objectives than the committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated,”

The unemployment rate in the US stands at 5.9%, its lowest level in 12 years.

When pressed on the exact timing of an Interest rate rise, and what she meant by a couple, Fed Chair Janet Yellen told a news conference "So, a "couple," I believe, the dictionary probably says a "couple means two” Which now has analysts pricing in a rate hike in April after two more Fed meetings..

CPI numbers from the US came in at 1.7% yesterday against analysts’ expectations of 1.6% and well below the Fed’s target of 2%.

“This may be one of the reasons for the Federal Reserve to hold off lifting rates a little longer if Inflation continues to underperform” noted analysts from Fibogroup forex brokers

“If the oil price continues to drift lower this may also have an impact on the rate decision as consumers will have more money in their pockets at the end of the day which means less pressure on Inflation”

Market Overview by FiboGroup

 

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The Australian dollar is trading higher today bouncing off a fresh four and a half year low from yesterday’s trade, as the US looks set to move on Interest rates early next year.

At 7.15pm (AEDT) the Australian dollar is trading at US81.66 cents after falling as low as US81.07 cents in yesterday is trading.

Citing comments from Fed president Janet Yellen, analysts now predict that the US central bank will lift rates in April 2015 from their record lows.

Yellen also mentioned that she is prepared to let the unemployment rate fall from its current rate 5.8% to as low as 5% which should help push the Inflation rate in the US to the bank’s target rate of 2%.

The Australian dollar will find strong resistance at US82.00 cents as trader’s book in profits for the weekend claim analysts from Fibogroup.

We expect the currency to find strong support around the US80.50 cents level as we head into Christmas.

The Australian dollar is expected to keep falling next year towards the RBA’s preferred level of US75.00 cents as unemployment rises and the potential for an interest rate cut in Australia weighs on the currency.

Market Overview by FiboGroup

 

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The Australian dollar is trading in a tight range today after last week’s US Federal Reserve meeting and as traders get ready for the holiday season.

AT 7.10pm (AEDT) the local currency is trading at US81.48 cents up form US81.28 cents on Friday.

The Aussie dollar has now fallen more than 10% in the last 6 months as weak commodity prices and a recovering US economy including the possibility of an Interest rise has put pressure on the currency.

A growing number of Analysts are now jumping on board and predicting the Australian dollar is headed for around US75 cents next year as a slowdown in China and further falls in the Iron ore price, Australia’s biggest export drag down the local economy.

A report from the department of Industry predicted that iron ore prices would fall to around US$63 a tonne and noted,

"The current market oversupply is expected to prevail through the start of 2015 in response to a likely ongoing cyclical downturn in China's housing sector," the report said. "More of China's production is expected to exit the market, particularly over the northern winter, when operating costs typically rise, although a longer period of even lower iron ore prices may be required than previously expected to push supply out of the market."


The sharp decline in the Australian dollar however is a boom for some sectors of Australia’s economy such as tourism, manufacturing and retail sales as the local population snaps up imported goods at cheaper prices in the lead up to Christmas.

Market Overview by FiboGroup

 

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Forex weekly analysis from FIBO Group. (22 - 26.12.14)

[video=youtube;ofeNZt8IXOg]https://www.youtube.com/watch?v=ofeNZt8IXOg[/video]​

We expect trading in the currency markets to be a little quiet this week as traders get ready for the holiday season.There may be some action on Tuesday as the market awaits the release of the latest GDP numbers form the UK and the durable goods number and quarterly GDP numbers from the US.

Forex weekly analysis from FIBO Group

 

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The Australian dollar has fallen through the psychological US81.00 cents barrier, as a fall in key commodity prices such as oil and the local export Iron ore weighed on the currency.

At 5.47pm (AEDT) the Australian dollar is trading at US80.98 cents after falling to as low as US80.87 cents a little earlier in the day.

Iron ore fell overnight to $US67.90 a tonne, and Brent Crude oil dropped more than 2% towards the $US60.00 a barrel mark.

IG market strategist Stan Shamu said iron ore and oil stocks had jumped quite a bit over the last few days but today the rally ran out of steam,

'We've seen a pullback in iron ore and crude oil,' Mr Shamu said.

'That's the main source of the weakness that we're seeing today.'

Without the presence of local data, the Aussie dollar may come under further pressure today in the lead up to the release of the latest Durable goods report and quarterly GDP numbers from the US.

The consensus for the durable goods figure is a number of 1.8% well up on last month’s figure of 0.4%, and with the momentum lying with the US dollar over the last few sessions we may see the American currency continue to strengthen as the day unfolds.

Market Overview by FiboGroup

 

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The Australian dollar sunk to a fresh four year low overnight after strong GDP data from the US yesterday added more pressure on the US Federal reserve to lift Interest rates early next year.
At 7.30pm (AEDT) the Australian dollar was fetching US81.11 cents after reaching a new 4.5 year low of US80.87 cents yesterday.
US gross domestic product increased 5% between July and September, the Commerce Department said, coming in well ahead of analysts’ expectations of 4.3%.

“The picture out of the US just keeps getting better and better” noted analysts at Fibogroup forex brokers.

“With numbers like these the fed will have to act soon on rates which can only add to the woes of the Australian dollar”

A growing number of analysts are also predicting a rate cut in Australia next year as unemployment grows and Inflation slides which will reduce the Interest rate gap between the US and Australia and lessen the attractiveness of the carry trade.

Interest rates in Australia currently stand at 2.5% while in the US they stand at 0.25%.

Addressing concerns about a slowdown in China and the effects on the Australian dollar Lee Hardman, an economist at Bank of Tokyo-Mitsubishi UFJ in London noted,
"It's been a weak year for the Australian dollar, reflecting the slowing growth outlook for China, which has resulted in a further deterioration of Australia's terms of trade," Lee Hardman, an economist at Bank of Tokyo-Mitsubishi UFJ in London.
"We still think there's scope for further downside going forward."

Market Overview by FiboGroup

 

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The Australian dollar is trading slightly higher today following on from the strong finish of the local sharemarket.

At 7.10pm (AEDT) the Aussie dollar is trading at US81.37 cents up from US81.20 cents last week.

The ASX 200 rose 1.5 per cent to close at 5,474 boosted by strong gains in the resource sector and a slight rise in the iron ore price to $US66.70 a tonne.

CMC markets analyst Michael McCarthy noted that trading had been volatile amid weak volumes but the market gathered momentum as the day went on,

"The market has gone from strength to strength today and the big surprise is the resources stocks," Mr McCarthy said.

"Although we did see pressure on energy stocks at the open, both Rio and BHP opened in the green and headed high very quickly."

Easy Forex senior dealer Francisco Solar said the Australian dollar benefited from improved risk appetite after the four-day Christmas break.

"There was a positive end to the session which reflected on the Aussie dollar," he said.

"There seems to be a bit of a risk appetite, or risk seeking behavior in what has been a session characterized by no catalyst really so the Aussie in that environment tends to do quite OK."

Market Overview by FiboGroup

 

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The Australian dollar is holding up pretty well today even as a looming presidential election that was triggered in Greece yesterday threatens to create instability in the Eurozone.

At 7.16pm (AEDT) the Australian dollar is trading at US81.66 cents up from US81.30 cents at yesterdays close.

Greece's government was forced to call early national elections yesterday after failing to elect a president raising concerns of a victory for the opposition party who are in favor of making changes to the austerity measures put in place to help Greece deal with the financial crisis.

The left-wing opposition Syriza party, which has a slight lead in the opinion polls, would like to change the terms of the bailout deal which is seen as crucial to Greece’s long term financial health.

The Athens stock market plunged more than 11% immediately after the news before recovering to close the day out down around 4%.

“The news is seen as negative for the Australian dollar” noted analysts from Fibogroup forex brokers.

“The repercussions will be felt throughout the Eurozone as well as the global financial system as a whole which will only put more pressure on riskier currencies such as the Aussie dollar and may help strengthen the US dollar as Investors seek safety”.

Market Overview by FiboGroup

 

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The Australian dollar is trading higher today after data out of the US yesterday missed analysts’ expectations and manufacturing numbers out of China came in slightly above consensus.

At 9.20pm (AEDT) the local currency is trading at US81.90 cents up from US81.80 cents in yesterday’s trade.

The Consumer Confidence Index from the US came in at 92.6 yesterday which was slightly below expectations of 93 providing some support for the Aussie dollar as the market reacted to the disappointing news.

The HSBC Manufacturing Purchasing Managers Index (PMI) out of China came in at 49.6 which was just above the markets expectations of 49.5 but down from 50 in last month’s reading.

A number less than 50 generally shows a contraction in the economy.

“The Australian dollar received a boost from underperforming US data yesterday which pushed it towards the US82.00 cents level” noted analysts from Fibogroup forex brokers.

“We believe this is only a temporary reprieve and the currency will continue it’s down trend later today or at the start of the New Year”.

The last test of the year for the Aussie dollar will be a round of news due out of the US later today including continuing jobless claims, pending home sales and the Chicago Purchasing Managers Index which may dictate whether the Australian dollar sinks or swims as we round out the year.

Market Overview by FiboGroup