Talking Points:
- Australian Dollar May Bounce as Risk Appetite Recovers After Sharp Drop
- New Zealand Dollar Declines as Markets Position for RBNZ Rate Decision
- Euro, Yen Gain on Risk Aversion in Asia But Momentum May Be Fleeting
The New Zealand Dollar underperformed in overnight trade. The move tracked a drop in 3-month borrowing costs, hinting it may have reflected pre-positioning ahead of tomorrow’s RBNZ monetary policy announcement. Traders are pricing in a 64 percent probability of a 25 basis point rate cut, according to OIS-derived estimates.
The US Dollar likewise faced selling pressure as prices corrected after hitting a weekly high in yesterday’s session. The Euro and the Japanese Yen proved best-supported as risk aversion carried over from Wall Street onto Asian bourses, encouraging the unwinding of carry traders funded in the two low-yielding currencies.
Looking ahead, a quiet economic data docket in European and US hours seems likely to put sentiment trends at the forefront. S&P 500 futures are pointing firmly higher in late Asian trade, hinting a recovery in risk appetite may be afoot after the MSCI World Stock Index – a proxy for the daily ebb and flow of global investors’ confidence – dropped to a three-week low yesterday.
This may cap Euro and Yen gains while offering a lifeline to higher-yielding alternatives, such as the Australian Dollar. The currency completed its largest two-day loss in six weeks against its US counterpart at the close of yesterday’s session. We are looking to any bounce from here as a selling opportunity.
Losing Money Trading Forex? This Might Be Why.
Asia Session
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
23:30 |
AUD |
Westpac Consumer Conf. Index (DEC) |
100.8 |
- |
101.7 |
23:30 |
AUD |
Westpac Consumer Conf. (MoM) (DEC) |
-0.8% |
- |
3.9% |
23:50 |
JPY |
Machine Orders (MoM) (OCT) |
10.7% |
-1.5% |
7.5% |
23:50 |
JPY |
Machine Orders (YoY) (OCT) |
10.3% |
0.6% |
-1.7% |
23:50 |
JPY |
Money Stock M2 (YoY) (NOV) |
3.3% |
3.5% |
3.7% |
23:50 |
JPY |
Money Stock M3 (YoY) (NOV) |
2.7% |
2.8% |
2.9% |
00:30 |
AUD |
Home Loans (MoM) (OCT) |
-0.5% |
-1.0% |
2.0% |
00:30 |
AUD |
Investment Lending (OCT) |
-6.1% |
- |
-8.2% |
00:30 |
AUD |
Owner-Occupier Loan Value (MoM) (OCT) |
0.4% |
- |
3.1% |
01:30 |
CNY |
CPI (YoY) (NOV) |
1.5% |
1.4% |
1.3% |
01:30 |
CNY |
PPI (YoY) (NOV) |
-5.9% |
-6.0% |
-5.9% |
06:00 |
JPY |
Machine Tool Orders (YoY) (NOV P) |
-17.9% |
- |
-22.9% |
European Session
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
06:45 |
Unemployment Rate (NOV) |
3.4% |
3.3% |
Medium |
|
06:45 |
CHF |
Unemployment Rate SA (NOV) |
3.4% |
3.4% |
Medium |
07:00 |
EUR |
German Trade Balance (OCT) |
21.7B |
22.9B |
Medium |
07:00 |
EUR |
German Current Account Balance (OCT) |
23.7B |
25.1B |
Medium |
07:00 |
EUR |
German Exports SA (MoM) (OCT) |
-0.6% |
2.6% |
Low |
07:00 |
EUR |
German Imports SA (MoM) (OCT) |
-1.0% |
3.6% |
Low |
07:00 |
EUR |
German Labor Costs WDA (YoY) (3Q) |
- |
3.1% |
Low |
07:00 |
EUR |
German Labor Costs SA (QoQ) (3Q) |
- |
0.9% |
Low |
09:30 |
BOE FPC Nov. Meeting Minutes |
- |
- |
Medium |
Critical Levels
CCY |
Supp 3 |
Supp 2 |
Supp 1 |
Pivot Point |
Res 1 |
Res 2 |
Res 3 |
1.0729 |
1.0802 |
1.0847 |
1.0875 |
1.0920 |
1.0948 |
1.1021 |
|
1.4801 |
1.4905 |
1.4956 |
1.5009 |
1.5060 |
1.5113 |
1.5217 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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