Forex Forecast

AUD Finds A Foothold The Australian dollar managed to steady itself overnight after Tuesday’s scare about China’s appetite for iron ore, but the currency could not fully recover lost ground. Tuesday’s comments from an Australian miner appeared to provide anecdotal evidence of a Chinese slowdown and we can expect AUD to show extreme sensitivity to […]

Dollar Up, Oil Down The US dollar is back on the front foot, with declines in the major equity indices and oil prices weighing most conspicuously on the commodity currencies such as AUD and NZD. Apart from lingering concerns about slower growth in China, the Saudi Arabian Oil Minister’s assertion that output could be boosted […]

Risk Stumbles Further Risk appetite was soft overnight as equity markets in the Eurozone sold off across the board. Ongoing concerns about growth in emerging markets may be playing a role, but in the wider context of asset market performance we still believe investors are now having trouble to justify further gains in the current […]

RBA Stays Course The RBA sounded a cautious but steady tone with its release of policy meeting minutes, but this could not prevent AUD from taking a knock after commercial entities voiced concerns about Chinese demand for resources.

Continued Dollar Fatigue After its recent run higher, the US dollar is still suffering from what we see as merely a temporary show of fatigue entering the Asian session, where market conditions will be thinner than usual due to the Japanese holiday (Vernal Equinox Day).

Fedspeak in Focus Markets continued to trade in tight ranges overnight amid lack of data and official commentary. However, risk markets were generally softer due to the absence of more positive catalysts and we believe this will be an increasingly dominant factor in markets up ahead.

Narrow Rangers Prevail Ranges were broadly flat overnight but the dollar has checked some of its advance amid fears that data is still not strong enough in the US for the Fed to continue allowing market to price out expectations for monetary easing.

Yield Watch Our bullish US dollar view remains intact. Granted, Friday’s ‘underwhelming’ US headline data prints weighed on the US currency – the University of Michigan consumer sentiment index slipped to 74.3 in early March from 75.3 in February; industrial production was unchanged m/m in February; and the y/y reading for core consumer prices slowed […]

Quiet Trading Pre-US Data Risk appetite continued to hold during the European session though there was a general sense of calm ahead of inflation figures due later in the US. We are looking for headline inflation to edge back up to 3% (cons. 2.90%) but the US Treasury market appears to be of greater concern […]

Awaiting More US Data Currency markets were mostly indecisive during the Asia session, although there was a very brief episode of dollar buying when Richmond Fed President Lacker explained why he dissented again at Tuesday’s FOMC. Lacker favours a rate hike in 2013.

Dollar Takes A Breather The US dollar is taking a breather after the strong run-up in the past few days, but the data flow continues to be broadly supportive, underlining our ‘no QE3’ Fed view. Indeed, the downtrend in US jobless claims remains intact, with the latest reading for the week of March 10 dipping […]