Sharechat Logo

Morning FX thoughts - 17 Feb '12

Westpac Global Markets Strategy Group

Friday 17th February 2012

Text too small?

An up-day in risk markets continued the yoyo pattern which has prevailed since 9 February. Positive catalysts included stronger US data for housing starts and regional manufacturing, plus a German newspaper (Welt) report that the ECB will participate in the Greek bond swap.

An advisory firm’s note predicting the Greek bailout package would be approved on Monday also had market impact. The global easing theme was continued by Sweden’s central bank which cut its policy rate by 25bp to 1.50%.

The S&P500 rose from the NY open and is currently up 1.0%, negating the previous day’s technically bearish key day reversal. Commodities are slightly higher, the CRB index up 0.4%, oil +0.7%, copper -0.1%, and gold -0.2%. The improved risk sentiment pushed the US 10yr treasury yield 8bp higher to 2.01%. A 30yr inflation-linked auction went poorly at a real yield of 0.77% - 7bp above market.

The US dollar index is around 0.4% weaker. EUR extended the Asian session decline to 1.2974 by midday London but then reversed in NY to 1.3123. USD/JPY rose from 78.40 to 78.96 – a fresh four month high – as safe-haven yen underperformed. AUD outperformed, thanks to a positive employment data surprise, rebounding during the London morning from 1.0646 to 1.0774. NZD similarly bounced from 0.8246 to 0.8342. AUD/NZD held its earlier gains at around 1.2920.

AUD/USD and NZD/USD outlook next 24 hours: The local calendar is quiet apart from RBNZ Governor Bollard’s speech to an Australian-NZ business group in Auckland at noon (NZT).  AUD remains inside its two-month old ascending channel, the lower bound today providing support at 1.0680. NZD, in contrast, did break below the comparable channel but has returned inside (just), still leaving it vulnerable to further declines if 0.8320 gives way.



  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