Market Overview by FiboGroup - 2014

The Australian dollar pulled back on Thursday following in the footsteps of the New Zealand dollar following the release of weaker than expected inflation numbers. The 0.3% figure for the September quarter was in line with analysts’ expectations and took the annual rate to 1%. The reserve bank has consistently mentioned that they would like to see inflation between 1% and 3% so they can’t be all that pleased at the moment as inflation sits at the bottom of their target range.

The figures have put into question future rate hikes from the RBNZ.

“The overall story in currencies is one of the NZ dollar remaining friendless and the current G10 whipping boy in a generally stronger US dollar environment following yesterday’s very soft CPI report,” National Australia Bank global co-head of FX strategy Ray Attrill said.

The Australian dollar was also pressured overnight by the release data from the US, which came in above analysts’ expectations. Existing home sales in the US rose 2.4% against a consensus of 1% and much stronger than the previous month of -1.8%.

More info: FiboGroup
 
The Australian dollar is trading above the US88.00 cent mark today as a stress test was carried out that showed the stability of European banks. Four out of every five banks passed the test which was introduced to prevent a repeat of the 2008 financial crisis.

Later today Investors will focus on the Reserve Bank of Australia head of financial stability Luci Ellis’ speech to a University of Sydney conference on the global financial crisis and the all-important housing market.

With a lack of economic news coming out of Australia this week Analysts will focus on Key data due out this week starting with the durable goods report and consumer confidence numbers tomorrow which may give a clearer picture about the strength of the US economy. On Wednesday we will see the release of the latest interest rate decision from the FED where no changes are expected to be made and the rate will remain at 0.25%. Traders will pay close attention to the following speech from the bank about a possible rate rise in the future.

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More info: FiboGroup
 
The Australian dollar is hovering around the US88.20 cents mark today holding its ground despite falls in overseas sharemarkets overnight. Fears also grew yesterday about the state of the European economy after German business confidence had its six straight monthly decline confirming the economy is treading water and also boosting the Aussie.

The Aussie currency’s resilience will be tested later today as we await the release of the Durable goods orders and the Consumer confidence index from the US are released to the market. Both of these Key indicators show confidence in consumer spending and depending on the result are sure to aid in determining the direction of the Australian dollar.

With the release of the Interest rate decision from the US due out of the US tomorrow traders may start placing their bets in anticipation of the big release.

LTG GoldRock director Andrew Barnett said the Federal Open Market Committee meeting was the big event of the week for currency markets.

“The market is likely to start speculating on Wednesday what (US Fed chair Janet) Yellen is going to say,” he said.

“She realises that she’s going to have to raise rates at come point next year if the current economic trends continue.”

Mr Barnett said that if the Federal Reserve looked keen to raise its interest rate then the US dollar would rally and put downward pressure on the Aussie dollar.

“I think the smart money will speculate on higher rates and push that US dollar higher,” he said

Market Overview by FiboGroup
 
The Australian dollar is sharply higher today after a round of disappointing economic news from the US yesterday saw Investors ditching the greenback. In today’s trading, the local currency is sitting around US88.65 cents up from a low of US87.94 cents yesterday.
US durable goods orders for September came in at -1.3% against analysts’ expectations of 0.5% bringing to a halt the recent positive economic news out of America.

The number spooked investors as it was completely unexpected and they couldn’t get out of the US currency quick enough. It is a very Important Indicator and it may be a sign that the US economy is not recovering as well as many thought.
The US dollar may come under further pressure depending on the tone of language used by the Fed when they present their latest monetary policy statement later today. If they appear reluctant to talk up the economy, we may see Investors ditching the greenback further. Rates are expected to remain on hold at 0.25% where they have been sitting since 2008.

Market Overview by FiboGroup
 
The Australian dollar has tumbled more than one US cent after the latest monetary statement from the Federal Reserve. Today the local currency is trading at around US87.70 cents down from a high of US89.10 in yesterday’s trade.

The US central bank mentioned that it was happy with the recent strength of the labor market and brushed off fears of low inflation and a slowdown in the global economy. The American economy has added a monthly average of 200,000 thousand jobs this year showing robust growth and at least from an employment point of view a strengthening economy.

Westpac senior market strategist in Wellington Imre Speizer said the Fed now seemed more willing to raise its interest rate than in previous meetings.

“The US Federal Reserve surprised the market, boosting the US dollar,” he said.

“A key change was its assessment that the labour market had improved.”

The bank reiterated that it will not raise the Federal Fund rate for a “considerable time”, but a key change was that it said that was conditional on incoming information, Mr Speizer said.

The Fed has kept to its word and decided to wind up its economic stimulus program at the end of October. The phasing out of the program began in January of this year by reducing the amount of purchases for treasuries and mortgage backed securities by $10 billion after each meeting.

Market Overview by FiboGroup
 
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