Today’s Key Market Drivers: 12th April 2019
US Dollar rises after stronger than expected US data.
The US Dollar bounced back on Thursday following better than expected weekly jobless claims and Producer Prices data. The greenback’s rise sent the Aussie and Kiwi Dollars back lower. Both look vulnerable and the likelihood is from a technical and fundamental perspective both currencies will likely weaken in the short term.
Traders are beginning to price in their expectation that the US Fed won’t consider cutting rates in 2019 as some suggested they may. Recent jobs data and inflation figures are not pointing to enough ammunition for the Fed to consider cutting rates and therefore we are seeing the US Dollar firming against all of its major rivals and in particular emerging market currencies.
US company earnings season is about to kick off and it will give traders another good indication of how profitable listed companies in the USA are doing. If the US reporting season shows companies are still doing well and exceeding expectations then we will likely see the US 10 Year Treasury Yield rise back higher and this will drag up the US Dollar and push back lower the AUD v USD and NZD v USD.
Pound mostly higher following Brexit extension.
The British Pound didn’t soar on the news of another Brexit extension but it did rally against most of its major rivals and rather strongly against weaker Aussie and Kiwi Dollars.
Fundamentally the UK is doing rather well under the weight of Brexit with most economic indicators showing the economy is ticking along within the market’s expectations. If the Euro Area is close to hitting a bottom economically then the UK is going to ultimately benefit as the Euro Area is the UK’s biggest trading partner and when things improve across Europe they will likely improve in the UK too. To be frank with you the Pound has been battered from pillar to post in recent months and whilst I am happy to trade it, I don’t have anything at present to consider.
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About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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