Sharechat Logo

Morning FX thoughts - 14 Sept '11

Westpac Global Markets Strategy Group

Wednesday 14th September 2011

Text too small?

Sentiment improved slightly on scant new information.

Europe remains the centre of attention and comments from French bank officials that Greek exposures are manageable and access to USD funding remains intact seemed to soothe the markets. Germany’s leader Merkel was optimistic Finland’s conditions for lending to Greece would be met, and the ECB bought Italian bonds, both supporting the improved sentiment on the day.

Equities, commodities, and risk currencies all rose albeit in hesitant fashion and concerns around the European sovereign and banking sectors remain. The Eurostoxx 50 closed up 2.1% and the S&P500 was up 1.0% until an hour ago, a slump occurring as we write.

The CRB commodities index is up 0.5%, oil +2.1% and copper +0.2%. US 10yr treasury yields are 4bp higher at 1.99%. A 10yr auction was awarded 1bp above market yield and the bid-cover of 3.0 was slightly below average.

The Greek 10yr rose 94bp to 24.48% as selling continued, and the Italian 10yr rose 14bp around a weak auction and denial China was planning to buy Italian debt.

The US dollar index ground lower amid the better risk atmosphere. EUR rose from 1.3558 to 1.3739 but has slipped as we write to 1.3674. USD/JPY slipped from 71.12 to 76.81 during the London morning and remained thereabouts through the NY session.

AUD ranged sideways between 1.0263 and 1.0362, perhaps weighed by the earlier reported slump in Australian business confidence. NZD data earlier in the day was also uninspiring, but it managed to grind slightly higher to 0.8272. AUD/NZD dribbled lower from 1.2560 to 1.2500.

AUD/USD and NZD/USD outlook next 24 hours: AUD momentum remains negative and any 1.0480 remains major resistance above, with minor resistance at 1.0385. Any break below 1.0255 today points to 1.0110 next. Consumer sentiment and dwelling starts are released today, our expectation for the latter below consensus. NZD’s recent rally looks corrective and should not exceed 0.8350.



  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