Today’s Key Market Drivers – 27th September 2017

The US Dollar continued to strengthen and the Euro continued to weaken on Tuesday as traders see increased political uncertainty after Germany’s national election and the increased likelihood the US Fed will raise the official cash rate one more time before Xmas. Janet Yellen delivered a speech on Tuesday and certainly sounded more positive than negative and this helped the US Dollar to fresh new highs against the Euro, or if you are looking at an MT4 currency platform that would be fresh new lows for the Euro against the US Dollar. This morning we’ve seen the Euro close below 1.1813 the Daily Trading Plan Trend Direction Change Price, which indicates a new trend lower has likely begun. The Euro Area throughout 2017 was looking so “together” with a new pro-Euro French President, a Central Bank that has signaled the worst is behind us and the likelihood the current German Chancellor and her Government would be returned comfortably when elections were held. Chancellor Merkel is hanging on by a thread after the weekend’s elections and must form a coalition government with political enemies which are causing traders to sell the Euro against the backdrop of political instability. What has also exacerbated the Euro’s slide this week has been comments from the French President saying he wants an overhaul of how the Euro currency works, just another bit of instability for traders to digest. Traders have loved the Euro for the past 6 months and now it appears it’s the US Dollars turn again. German and Euro Zone CPI data, as well as the official Euro-Zone unemployment rate, are due for release on Thursday and Friday and if they beat economists’ expectations these data numbers could give traders reason to buy back their Euro positions.


The Aussie Dollar has fallen to below 0.79c against the US Dollar for the first time in nearly two months. Just like the EUR v USD the AUD v USD has closed a daily candle below the important Daily Trading Plan Trend Direction Change price which for the AUD v USD was 0.7890. The local Aussie currency has succumbed to US Dollar strength rather than Aussie Dollar weakness as traders are buying back into the greenback expecting higher interest rates and US Treasury Yields in coming months.

Today’s economic calendar shows the high impacting news is in the US trading session with Durable Goods data set to be released. Durable Goods data is closely eyed and considered important because it measures the purchase of goods that are set to last more than 3 years. Such as washers, TV’s, fridges, furniture etc, which are big-ticket costly items and therefore if there is a better than expected Durable Goods number it can indicate Americans are prepared to spend more money and the economy is continuing to strengthen. A better than expected Durable Goods number would likely see traders buy more US Dollars with an even higher expectation the US Fed will raise the official cash rate before Xmas. A solid Durable Goods number would also likely help boost inflation expectations.

Tomorrow at 6.00am the RBNZ will release its monthly policy statement which is the only official Central Bank statement being released this week. We watch 8 Central Banks that directly relate to the currencies we trade. The RBA, RBNZ, BOJ, BOC, US Fed, BOE, ECB and SNB.

 

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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