Finport Currency Brief - Courtesy of Compass Global Markets.
Good morning, Happy New Year to all and welcome to the first Currency Brief of the year.
If the latter part of 2017 is anything to go by then the first few months of 2018 are set to be very interesting. I forecast a weaker US Dollar across the board over the next couple of quarters. That should result in the A$ markedly higher there, however struggling against the Euro and British Pound as their respective central banks bring in tighter monetary conditions. What should also add to the above is an increase in US$ selling and investing "offshore" as the global economic picture remains healthy and the worlds equity markets play catch up with the US.
Back to the here and now and the A$ finished the week against the Greenback higher still, as US unemployment data disappointed and we open 300 points above levels seen a few days before Christmas. As mentioned I forecast the A$ to continue to strengthen, however there should be some short sharp corrections for exporters to take advantage of. Nonetheless, both sides of the fence should place orders in the market to take advantage of this continued volatility. Elsewhere A$Euro and A$GB Pound remain at highs that have held since mid November, as political uncertainty on both sides of the Channel hurt their respective currencies. Decent levels to clear those EU invoices, given the strong chance of a correction up here.
Today is a Japanese bank holiday ("Coming of Age Day"), so the markets should have an easier start to the week as we wait for European market makers to hit their desks.
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