| Currency <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> | Daily Percentage Change (%) | Intraday High | Intraday Low | Day's Range (pips) |
| NZDUSD | +0.8% | 0.6454 | 0.6374 | 80 |
| USDCHF | -0.6% | 1.2384 | 1.2270 | 114 |
AUDUSD | +0.6% | 0.7642 | 0.7582 | 60 |
NZDUSD<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Following a better than expected NBNZ business confidence survey, traders bid the Kiwi higher in the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />New York session. Although pessimism still reigns supreme over the private sector, the accompanying inflationary expectations kept the underlying buoyed on the day. According to the inflationary component, expectations rose to a 15-year high 3.5 percent. The figure supports the view that the Reserve Bank of New Zealand will likely keep rates at the current pace rather than implement reductions that were earlier estimated. The notion bolstered carry traders still interested in the high return that Kiwi based assets offer versus other major counterparts. Separately, cross bidding accelerated the majors move with gains added on through technical tests in the EURNZD and NZDJPY.
US data was conversely discarded as rumors spread of the lower consumer confidence figure. With the results already priced in to the market, sellers amassed temporarily following the figure, mounting on a higher than estimated inflationary expectation component. However, following the Federal Reserve minutes release, bidders returned to buy on pull backs as the central bank offered no clear directional bias on interest rates.
USDCHF
Dollar bears were on the prowl in the New York session following the slightly less hawkish minutes by the US Federal Reserve. Although noting that inflationary pressures still remained relatively high, policy makers expressed concern over a slowing economy in the months to come. The notion confirmed to market participants that the tightening cycle was indeed coming to an end, driving the dollar lower versus the Swiss franc. The re-emergence of buyers followed profit taking after the US consumer confidence report failed to spur any dollar enthusiasm. Additionally bolstering the move higher by the Swiss franc is sentiment of rising interest rates in the Swiss economy. Noting that the low levels of the franc remain disconcerting, SNB Chairman Roth continues to lead speculators into believing that higher rates may spur a rise in the underlying currency in the near term.
Support is likely to be lifted in the Asian session as the 1.2269 session low coincides with channel support on the 60-minute perspective. Subsequently, it corresponds with a lower supported trendline, boosting the effectiveness of the short term confluence, including the 1.2274 figure boasting a 61.8 percent fib level from the weeks move. With bids emerging likely, surrounding the 1.2275 region, upside potential remains intact as resistance is likely to come in on the 1.2350 figure. Downside defense is absent, conversely, until well below 1.2250 should a break occur at the 1.2275 figure.
Much like the other majors, the Aussie was additionally boosted on the day following a rather pessimistic round of US economic data. The notion caused the Australian major to bounce off of support found just below the 0.7600 figure as carry traders continued to see opportunity in the currency. Subsequently, with interest rates likely to continue their ascent in the Pacific Rim economy, investors are attempting to move capital to higher rate of return as the Federal Reserve will likely not raise rates till the end of the year.
Lending to the Australian rate hike notion was an optimistic leading index report out late yesterday in New York. Expected to moderate, the leading index survey jumped into positive territory after declining the month prior. Expectations are now running higher of advancing economic growth as fundamentals have stabilized from previously viewed teetering. The notion should be further boosted tonight as traders await the release of the monthly retail sales report. Although expected to moderate slightly, consumer interest is expected to remain positive.
Jumping from the 0.7600 handle support, the Australian component continues to consolidate ahead of event risk seen in the upcoming retail sales figures. The fundamental release is likely to purport a test of the 0.7640 figure on the 60-minute shot with a break above queuing up the bull run to the 0.7670 ceiling. Comparatively, however, a move lower or break through current support at 0.7625, would convince bulls otherwise as sellers are looking heavy into the 0.7595 break.
