Sharechat Logo

Morning FX thoughts - 29 July '11

Friday 29th July 2011

Text too small?

It was a lacklustre evening, during which the US dollar made modest gains. US pending home sales data beat consensus and jobless claims fell slightly, boosting US equities initially. The lack of progress on the US debt ceiling later dampened investor appetite, though, and the S&P500 is currently unchanged on the day. Commodities slipped below the recent range, the CRB index down 0.6%, with silver falling 1.2% and looking ready to reverse lower.

The US 10yr treasury yield is 3bp lower at 2.95%, mainly due to a disappointing Italian bond auction which saw the yield down to 2.93% around midday London. The US debt ceiling impasse hurt the US 7yr auction (as it has done for the other two auctions this week) which was awarded at 2bp above market yield with a bid-cover ratio of 2.6 (vs 2.9 10-auction average).

The US dollar index bounced 0.7% during the London morning, but slipped back in NY on the debt stalemate. EUR fell during the London morning from 1.4400 to 1.4254 after some weak Eurozone sentiment surveys, recovering to 1.4300 in NY. USD/JPY firmed from 77.63 to 77.90. AUD peaked at 1.1076 early London and is down to 1.0981 as we write. NZD similarly peaked at 0.8754 and fell to 0.8684. AUD/NZD slipped from 1.2690 to 1.2630.

AUD/USD and NZD/USD outlook next 24 hours: AUD has started a minor correction which should extend to the 1.0800-1.0875 area. NZD’s correction is similarly underway, and should reach 0.8500. AU house prices and private credit, and NZ building permits today pose minor event risks.

Source: Westpac Global Markets



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar gains on G20 preference for growth
NZ dollar dips as Wellington CBD checked for quake damage
NZ dollar gains, bolstered by RBA minutes, strong dairy prices
NZ dollar falls after central bank says it may scale up currency intervention
NZ dollar gains before CPI, helped by dairy gains, rally on Wall Street
NZ dollar trades little changed as US budget talks bear down on deadline
NZ dollar falls with equities on view US to sail over fiscal cliff
NZ dollar weakens as fiscal cliff looms, long bets unwind
NZ dollar sinks to three-week low as equities fall, fiscal talks in focus
NZ dollar slips as fiscal cliff talks grind slower in Washington