Australian Dollar May Bounce as Risk Appetite Recovers
- 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.
|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%|
|06:45||CHF||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||GBP||BOE FPC Nov. Meeting Minutes||-||-||Medium|
|CCY||Supp 3||Supp 2||Supp 1||Pivot Point||Res 1||Res 2||Res 3|
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To receive Ilya's analysis directly via email, please SIGN UP HERE
Contact and follow Ilya on Twitter: @IlyaSpivak
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.