Another interesting day

January 12, 2018

Finport Currency Brief - Courtesy of Compass Global Markets.

 

Good morning,

As mentioned yesterday, price action in the currency markets is starting to pick up now, seeing the A$US$ up 60 odd points as local Retail Sales data surprised to the upside and US Producer Prices fell. The latter suggesting inflation is on the wane in the US and some in the market are pricing out a third interest rate hike from the US Federal Reserve. Looking ahead and tonight is also expected to be exciting with the release of US inflation and it's own Retail Sales numbers. The odds of A$US$ hitting my forecast 80c next week have shortened dramatically.

Elsewhere A$Euro  pushed back from recent highs as the European Central Bank were less "dovish" than most had expected. This saw the Euro strengthen across the board, but with no more European data due for a couple of weeks future direction is likely to be determined onshore. Keep an eye on our data release. In the UK meanwhile, Nigel Farage has suggested the UK have a second referendum, which has put the cat amongst the proverbial - although he's not in parliament so we're waiting on Boris Johnson or preferably Theresa May to comment before the Pound is likely to fully react. In the meantime we should see A$GBP hold here, if not drift lower.

 

Have a great weekend.  

 

Jim Devonport

E: jim.devonport@finport.com

M: 0415 066 468 

 

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