Today’s Key Market Drivers – 18th July 2017

The Aussie Dollar is the flavor of the week with stronger than expected economic data out of China helping to lift the currency to a two year high against the US Dollar at 0.7833. With the next interest rate hike from the Fed already priced into the US Dollar and Trump’s political woes taking the shine off the US Dollar, there is every reason to believe the Aussie could continue higher in the short to medium term. Futures markets are showing traders are pricing in a less than 50% chance the US Fed will raise rates again this year even after Janet Yellen said in the past month the Fed did intend to raise rates one more time in 2017. Recent inflation data out of the US last Friday caused traders to pour cold water on Yellen’s comments about higher rates this year.


The Kiwi Dollar fell sharply this morning after the release of the latest inflation figures, which fell well below economist’s expectations. CPI was expected to show an uptick of 0.2% in the second quarter however inflation fell to flat line at 0% and on a Year on Year basis fell from 1.9% to 1.7%. This underlines the view that the RBNZ will likely drop the official cash rate to 1.5% in coming quarters. Please review TIA’s potential trade set up for the AUD v NZD further into this report.

Looking ahead to today the RBA’s July monthly minutes are due for release at 11.30am. In the European trading session, UK Inflation data will be a focus along with a German and Euro Zone economic sentiment survey. Traders are growing more and more aware of the fact interest rates in the UK and Europe will likely rise in the coming 12 months and this has helped the Euro and Pound higher over the past 3 months. The US trading session is high impacting data free with the next Central Bank announcements being the Bank of Japan and European Central Bank on Thursday.

 

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 key-note 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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