Currency Tech

EURUSD R 2: 1.3216 R 1: 1.3094 CURRENT: 1.3019 S 1: 1.2871 S 2: 1.2753

USDJPY R 2: 88.45 R 1: 88.01 CURRENT: 87.88 S 1: 86.83 S 2: 86.27

GBPUSD R 2: 1.5834 R 1: 1.5730 CURRENT: 1.5601 S 1: 1.5496 S 2: 1.5396

AUDUSD R 2: 0.9126 R 1: 0.9080 CURRENT: 0.8965 S 1: 0.8914 S 2: 0.8867

Market Brief

The Australian Dollar was lower this morning after the Bureau of Statistics reported that consumer prices increased less than expected in the second quarter (QoQ 0.6% act v 1.0% exp, 0.9% prev & YoY 3.1% act v 3.4% exp, 2.9% prev).

The Aussie found itself slide to its lowest levels in a week against its major counterparts (at the time of writing, the AUDUSD was -0.66%, just above 0.8950 levels after hitting a low of 0.8923), as speculation cooled that Governor Stevens will hike rates at the RBA's meet next week. Data showed that traders are betting there's no chance for a twenty-five basis point hike - and prior to today's report, there was a twenty-eight percent chance of an increase according to data collected by Bloomberg.

Although the soft data affords the RBA to buy some time for its next rate hike, we remain a bit sceptical as other factors such as a boosted demand for raw materials from China along with an unemployment rate at 5.1% (well below their Japanese and American counterparts) already has the Australian economy stretched.The Kiwi was a touch weaker this morning as a survey showed business confidence dropped to 27.9 from a previous reading of 40.2.

The Kiwi's losses were limited though, (after hitting an intraday low of 0.7278 the pair quickly rallied and was down just 14pts against the Greenback at the time of writing) as traders shrugged off the negative sentiments from the survey in favour of the widely expected 25 bps hike at the rate decision tomorrow. The Reserve Bank of New Zealand is expected to increase the overnight rate to 3.00%.

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