"Average" inflation data & more Trump turmoil has US$ weakening further

March 14, 2018

Finport Currency Brief - Courtesy of Compass Global Markets.

 

Good morning all;

AUDUSD: US inflation data came in as expected and although higher over the month, it wasn't fantastic and didn't spark thoughts of any additional US interest rate hikes, than have already been priced in. News that US President Trump sacked their Secretary of State also gave the US$ a knock and this pair rallied again, although has given up most of those gains as the market appeared happy with the replacement. Looking ahead we have just Chinese Industrial Production and US Retail Sales as the highlights for the rest of the week, which should mean price action remains stable and continue to test if not break 0.79c short term. 

 

AUDEUR: Half of the recent gains here have been eroded as the market is unwilling to take us too far out of our comfort zone, ahead of European Central Bank Presidents speech tomorrow night in which he is expected to confirm interest rates are to stay low for longer. This should push the pair back to my 0.65c target. 

 

AUDGBP: A solid dumping here as the UK Budget Release saw a revised pick up in the UK's growth forecast and a move to their target inflation level within the year. Positive reports on PM May's performance and bout of political stability is also helping the Pound. There is no further UK data until next week so those selling A$ can target 0.5650 as a "decent" level for now, although with all this good news now priced in I favour a push past that in the weeks to come. 

 

Jim Devonport

E: jim.devonport@finport.com

M: 0415 066 468 


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