The answer to our question was No!

February 6, 2018

Finport Currency Brief - Courtesy of Compass Global Markets.

 

Good morning all;

AUDUSD:  Yesterday's headline was the question "Is that it?" Well the answer was in the negative as this mornings release of weaker Trade Balance and Retail Sales data added to a massive sell off in US equities that resulted in another 1% downturn for the A$. However this afternoon's announcement from the Reserve Bank was quite neutral and has had a calming effect on price action. Focus now turns to a speech by Governor Lowe Thursday morning, but otherwise we look to the charts for technical direction. Support is seen around the 0.7825, being the 50% retracement of the run higher from 0.75-8150 over the last couple of months and given equities should recover from here, we'd favour that to be the low. 

 

AUDEUR:  Is back at the 0.6350 lows seen last week,as disappointing Australian data knocks the local currency, whereas all seems well in the EU. There is no European data of note due until next week, so one would think it is going to be hard work this pair to trade much lower - because if it does the next line in the sand is 0.6150, which is where we were exactly 2 years ago.  

 

AUDGBP: Had recovered slightly, as forecast, due to UK Services Sector data being shy of expectations and ahead of the UK  / EU BREXIT negotiations during the next few days. The Bank of England also meet on Thursday night and although they should keep interest rates on hold at 0.50%, we'll look for signs of a hawkish change to their accompanying statement. In the meantime 0.5650 is not bad for both buyers and sellers.  

 

Jim Devonport

E: jim.devonport@finport.com

M: 0415 066 468 

 

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