Currencies Still Range Bound but Geopolitical Risks Persist

It was another relatively quiet day in the markets yesterday with the main fundamental event, the RBA Rate Announcement, coming and going very swiftly with little impact on the currency allowing traders to get back to focusing on the Melbourne Cup. With little else in the way of fundamental drivers to move the market we saw the currencies once again drift back into ranges, with a move to the downside in Euro running into strong levels of apathy before it ground back up into the range.

Main themes that continue to dominate market chat include policy divergence which at present is very much dollar supportive, although is susceptible to any negative news out of Washington and geopolitical influences which are very much to the fore of traders thoughts.

The risk that comes with President Trumps Far Eastern Tour has been much debated but so far has resulted in little in the way of inflammatory statements or indeed tweets. These of course could be famous last words and many traders are loading up safe haven trade strategies to cover that eventuality. Oil has once again come back in the news and Cad and Nok traders especially are keeping close tabs on the developing situation in Saudi Arabia as tensions remain at high levels following recent arrests of high profile (and high wealth) individuals.

Looking ahead to today’s sessions and it looks like a case of ‘more of the same’ with range traders looking to win out as we are once again thin on the ground for fundamental data releases. However, there is always the potential of a rogue tweet sneaking out to upset the apple cart!

Chinese Trade Balance numbers are due in the Asian session which have the potential to move not only the Cnh but also the Aud and Nzd. It’s quiet through the London session and we have the regular crude oil inventories due out of the US later in the New York time zone, but probably the next big potential market moving event is the RBNZ rate announcement tomorrow morning at 7 am. This will be the first one after the recent change of government and Kiwi traders will be looking for something fresh to move the market.

Rakuten Securities Australia Review