Australian Dollar drops after soft data

1 February, 2018

The Australian dollar eased on Thursday following weaker-than-expected economic data. The Australian Dollar took an initial knock on Wednesday on news of tepid consumer price data, which came in at 0.6% compared to an expectation of 0.7%. This showed that a relatively strong economy has yet to translate into significantly higher inflation. The Reserve Bank of Australia (RBA) will make its next monetary policy decision on Tuesday next week. Although no change is expected, the market will react to any comments from the RBA. On Thursday, Australia’s building permit approvals data showed a slump of 20% on the month and 5.5% on the year, when a respective fall of 7.6% and a rise of 11.5% had been expected.

AUDUSD

A hawkish FOMC yesterday helped to revive USD demand, and so this pair was seen to decline overnight. AUDUSD was rejected from the 0.8125 level, where there is a confluence of highs from 2017 and trend line resistance from 2013. In the 4-hourly time frame, the pair has broken a channel and is now retracing lower. The pair is testing 0.8000 and a confirmed break could lead to a move to the next major support at 0.7955, followed by 0.7935. A reversal above 0.8038 is needed to once again test the highs.

GBPAUD

The GBP has been strong recently on the back of Brexit optimism, so combined with a weaker AUD, the GBPAUD pair could see significant movement. In the daily time frame, the pair acquired some bullish momentum and is now testing 2016 highs around 1.7800. A break here could lead to a test of the November high and channel resistance at 1.800 but there is some near-term resistance at 1.7900. On the flip-side, a reversal and break below 1.7670 is needed to change the outlook with a move to support near 1.7490.


Source link  
Markets recover after the drop

The markets decline on investors' fears that trade conflicts will drag on and slow down demand, and this dynamic coincided with breaking through important...

Markets pressured by Huawei problem

Alphabet and some other American IT companies have suspended business with Huawei, which is one of the first examples of major consequences for...

The climate is changing rapidly

British people need to fly less, drive electric cars, eat little meat and turn their home thermostats down to 19 degrees Celsius (66 Fahrenheit) in order to rein...


Chinese stocks saw their worst week

Chinese stocks have taken investors on a ride this year. Shanghai and Shenzhen have been the best performing global markets this year, with the Shanghai...

Risk-sensitive currencies on the rise

Stock markets show growth after the release of strong data for China and Japan as their respective PMIs were better than expected which supported...

Trump again puts pressure on OPEC

President Donald Trump told OPEC on Thursday that its members should start pumping more oil, marking his second warning to the producer group this year...


Turkish lira fell by 5% before elections

The Turkish lira dropped by as much as 5 percent against the dollar on Thursday morning, as the country gears up for elections this weekend. The greenback...

May won't ask for a long Brexit delay

Prime Minister Theresa May won't ask the European Union for a 'long' delay to the Brexit deadline, her office said, after pro-Brexit ministers objected...

Demand for safe assets grows

Markets remain under moderate pressure, despite the Fed comments. Powell's semi-annual speech in Congress reinforced expectations that the US Central Bank...

  


Share it on:   or