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AETOS Market Commentary 21/02/2019

AETOS Capital Group


The Euro’s closing price made little to no change from where it started, closing at 1.1340(+1 pip) against the greenback. On the euro side, EU Consumer Confidence upgraded modestly in February according to preliminary estimates, printing -7.4 vs. -7.9 previously. The pair beat its previous weekly high by a few pips, reaching 1.1370 and stabilizing nearby. FOMC Meeting's Minutes were slightly more encouraging than anticipated, leading to some dollar gains across the board. The EUR/USD pair pulled down and turned negative for the day as the document was less dovish than anticipated, with policymakers confident on growth and employment and concerned over slowing global growth. In relation to the balance sheet, the Fed could announce later this year a plan to stop reducing the balance sheet. Several participants saw further rate hikes appropriate this year if the economy evolves as expected. Today, Germany will release its January inflation figures (18:00 AEST), foreseen unchanged from the previous estimates, although more relevant will be the February preliminary Markit PMI estimates for the EU and the US. The US will also release December Durable Goods Orders and January Existing Home Sales on Friday 00:30 AEST.


The Aussie made no movements from its closing price yesterday, closing at 0.7166(0 pips). However, the Aussie did trade at a high of 0.7182(Highest level since February 6), aided by continued buying in the Chinese yuan and firmer commodity prices. After opening the session at .7166, the AUD/USD chopped around in Asian trade as a slight miss on Australian wage growth in the December quarter last year was partially offset by continued strength in the Chinese yuan. On the data front, Aussie dollar traders will be waiting for the Australia’s jobs report at 11.30am AEDT. Markets are looking for an increase in employment of 15,000 leaving the unemployment rate steady at 5%. With traders continuing to speculate on a RBA rate cut by the middle of next year, today’s report carries the potential to generate short-term volatility in financial markets, especially if stronger-than-expected.


The Japanese Yen weakened on Wednesday, closing at 110.79(-22 pips) against the greenback. The safe haven currency once again lost ground against the greenback during the Asian session, hurt by Japanese data. The USD/JPY pair reached 110.94, a new weekly high, following the release of January's trade data, as the Japanese trade deficit, which hit its highest in 5 years, affected by Chinese economic slowdown. Japan's total trade deficit expanded from a year earlier to ¥ 1,415.2B, as exports tumbled 8.4% while imports decreased by just 0.6%. European equities seesawed between gains and losses to finally close the day marginally higher, as caution prevailed ahead of the Federal Reserve Minutes. The pair swung alongside dollar's strength or weakness in the US afternoon, recovering the lost ground and finishing the day marginally higher. Japan will release during the upcoming Asian session the preliminary February Nikkei Manufacturing PMI, previously at 50.3, and the December All Industry Activity Index, foreseen at -0.2% vs. the previous -0.3%.

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The information above is of general nature only and does not take into consideration your objectives, financial situation or investment needs. The products and services provided are issued by AETOS Capital Group Pty. Ltd. (AFSL: 313016, ACN: 125113117). Trading Forex margin and CFDs carries a high level of risk, and losses can exceed your deposits. You are strongly recommended to seek independent financial advice before you make an investment decision. Please refer to our Product Disclosure Statement which you can obtain from our website for more details. AETOS has the ownership of the contents of this FX commentary. Copying, reprinting or publishing to a third party is not permitted.

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Source: https://www.aetoscg.com/uk/market-commentary
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