Talking Points:
Commodity Dollars Face Heavy Selling Pressure as Risk Appetite Unravels
S&P 500 Futures Point Toward Continued Risk Aversion in the Cards Ahead
See Economic Releases Directly on Your Charts with the DailyFX News App
The New Zealand Dollar underperformed in Asian trade following the RBNZ monetary policy announcement. While Governor Graeme Wheeler said that the bank expects “some further policy tightening will be necessary” in the future after the current wait-and-see period, he likewise issued a stern warning on the Kiwi. The central bank chief argued that the New Zealand unit’s current level is “unjustified and unsustainable” and projected a further “significant depreciation” down the road.
The Australian Dollar spiked briefly higher after an impressive set of Employment figures. The report showed the economy added a net 121,000 jobs in August, dwarfing expectations for a 15,000 increase. The unemployment rate also declined more than analysts projected, sliding to 6.1 percent. The Aussie’s gains proved short-lived however, with the currency shedding most of its post-data gains within just a few hours. We interpreted the currency’s inability to meaningfully advance following strongly supportive data as reinforcing a bearish technical break traced out over the preceding 24 hours and entered short AUDUSD.
Interestingly, the Canadian Dollar followed its commodity-bloc counterparts lower. The move tracked an overnight slide in S&P 500 futures, pointing to broader risk aversion as the underlying force behind strong selling pressure in at the upper end of the yield spectrum in the G10 FX space. This core catalyst may explain why the Kiwi was so stung by seemingly familiar jaw-boning from the RBNZ as well as why the Aussie was unable to truly capitalize on impressive news-flow. More of the same seems likely ahead as contracts tracking the benchmark US equity indexes accelerate downward ahead of the opening bell on Wall Street.
New to FX? START HERE!
Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
21:00
NZD
RBNZ Interest Rate Decision
3.50%
3.50%
3.50%
23:01
GBP
RICS House Price Balance (AUG)
40%
47%
48%
23:50
JPY
BSI Large All Industry (QoQ) (3Q)
11.1
–
-14.6
23:50
JPY
BSI Large Manufacturing (QoQ) (3Q)
12.7
–
-13.9
1:00
AUD
Consumer Inflation Expectations (SEP)
3.5%
–
3.1%
1:30
CNY
PPI (YoY) (AUG)
-1.2%
-1.1%
-0.9%
1:30
CNY
CPI (YoY) (AUG)
2.0%
2.2%
2.3%
1:30
AUD
Employment Change (AUG)
121.0K
15.0K
-4.1K
1:30
AUD
Full Time Employment Change (AUG)
14300
–
15.4K
1:30
AUD
Part Time Employment Change (AUG)
106.7K
–
-19.5K
1:30
AUD
Participation Rate (AUG)
65.2%
64.8%
64.9%
1:30
AUD
Unemployment Rate (AUG)
6.1%
6.3%
6.4%
2:00
JPY
Tokyo Avg Office Vacancies (AUG)
6.0%
–
6.2%
European Session
GMT
CCY
EVENT
EXP/ACT
PREV
IMPACT
6:00
EUR
German CPI (MoM) (AUG F)
0.0% (A)
0.0%
Medium
6:00
EUR
German CPI (YoY) (AUG F)
0.8% (A)
0.8%
Medium
6:00
EUR
German CPI – EU Harmonised (MoM) (AUG F)
0.0% (A)
0.0%
Low
6:00
EUR
German CPI – EU Harmonised (YoY) (AUG F)
0.8% (A)
0.8%
Low
8:00
EUR
ECB Publishes Monthly Report
–
–
Medium
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EURUSD
1.2763
1.2842
1.2880
1.2921
1.2959
1.3000
1.3079
GBPUSD
1.5808
1.5986
1.6098
1.6164
1.6276
1.6342
1.6520
— 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.Learn forex trading with a free practice account and trading charts from FXCM.
Source: Daily fx