Trading news

AUD pushed by commodity recovery, Russian PMI declines again

- Commodity currencies paired gains during the Asian session as investor sentiment towards commodities continues to gradually improve
- AUD/USD is on its way to testing the strong 0.7250 resistance level, the price action suggesting that the pair is lacking momentum as traders start to price back in a potential rate hike by the Federal Reserve
- The New Zealand dollar was other big winner in Asia in spite of raising expectation for a rate cut from the Reserve Bank of New Zealand and falling terms of trade
- NZD/USD, we maintain our bearish bias on the pair as the policy divergence theme comes back under the spotlight. On the downside, a support can be found at 0.6566
- Russian PMI data shows that the economy is suffering for the third month in a row, although we consider that while Russia is struggling on the international stage, its domestic economy is currently benefitting from low oil prices
- Very high inflation, coupled with a declining GDP does not leave much room for the Russian Central Bank to act. We remain bullish on the USDRUB 
 
Commodity currencies paired gains during the Asian session as investor sentiment toward commodities continues to gradually improve. Gold continues to push higher, up 0.58% to $1,245 an ounce, as the greenback lost ground against the G10 complex. Palladium was also on fire in Tokyo as the metal surged 1.60%. In the commodity market, futures on iron ore rose sharply overnight amid a cut in the reserve ratio by the PBoC, while crude oil prices kept pushing higher. The West Texas Intermediate crude was up 1.45% to $34.24 a barrel, while its counterpart from the North Sea, the Brent crude, was up 1.15% to $37 a barrel.
 
This environment proved a major tailwind for the Australian as AUD/USD surged more than 1% from tonight’s low and reached 0.7192 after the RBA decided to keep the cash rate target unchanged at a record low of 2%. The statement was broadly in line with expectations and was even perceived as relatively hawkish, especially when you consider the stable inflation outlook. AUD/USD is on its way to test the strong 0.7250 resistance level (already failed twice to break it to the upside). However, the price action suggests that the pair is lacking momentum as traders started to price back in a potential rate hike by the Federal Reserve. The pair is currently taking a breather at around 0.7180 as the rally loses steam.
 
The New Zealand dollar was the other big winner in Asia as the Kiwi appreciated 0.60% against the greenback in spite of raising expectations for a rate cut from the RBNZ and falling terms of trade. NZD/USD started pushing higher in the late Asian session, rising as much as $0.6640. As stated many times, we maintain our bearish bias on the pair as the policy divergence theme is comes back under the spotlight. On the downside, a support can be found at 0.6566 (low from February 29th), then 0.6547 (low from Feb. 16th).
 
On the equity market, most Asian regional markets posted strong gains, with mainland Chinese stocks leading the charge, boosted by the PBoC’s RRR cut. The Shanghai Composite was up 1.68%, while the tech-heavy Shenzhen Composite surged 2.32%. In Japan, the Nikkei edged up 0.37%, in Singapore the STI was up 0.21%, while in India the Sensex jumped 2.66%. In Europe, equity futures were trading in negative territory ahead of today’s euro zone PMI figures.
 
***Yann Quelenn, market analyst: Russian PMI declines again: “For the third month in a row, the PMI data released this morning shows that the Russian economy is still suffering. The index remains below the 50 mark which indicates a contraction. The Russian economy is facing economic sanctions that hinder its competitiveness. Russian exports keeps on declining, recent February new exports orders declined to 43.5 from 45.2. Yet, against all odds, the Russian currency is now strengthening and a one dollar note is trading below 74 ruble. We think that while Russia is struggling on the international stage, its domestic economy is currently benefitting from low oil prices. For example, Russian utilities have sharply increased their demand for fuel. Normally, they are supplied by long-term contracts with fixed (and higher prices). Utilities aside, others sides of the economy are facing much deeper difficulties and very high inflation coupled with a declining GDP does not leave much room for the Russian Central Bank to act. We remain bullish on the USDRUB.”***
 
Today traders will be watching manufacturing PMI from Norway; Markit PMI from Turkey, Spain, Italy, France, Germany, the UK, Brazil and the US; PMI manufacturing and retail sales from Switzerland; unemployment rate from Germany; manufacturing PMI from South Africa; unemployment rate from the euro zone; Danish PMI survey; Canadian GDP; ISM manufacturing PMI and ISM price paid from the US.

Tuesday, 01 Mar, 2016 / 10:28

Note: Company News is a promotional service of the Directory and the content isn't created by Finance Magnates.

Source : http://en.swissquote.com/fx/news

Trading news

 

Gold rose again as Middle East tensions increase

Gold updated a new annual high just below $1453/oz, which was followed by the [...]

Posted on Friday, 19 Jul, 2019 / 1:40 under

Stock Markets Trade Into Support

Stock Markets Trade Into Support For more analysis check out, please click [...]

Posted on Friday, 19 Jul, 2019 / 9:24 under

Brexit Headlines Again; ECB And Its Inflation Target; Markets Rebound A Bit

Brexit Headlines Again; ECB And Its Inflation Target; Markets Rebound A [...]

Posted on Friday, 19 Jul, 2019 / 8:14 under