Today’s Key Market Drivers – 28th September 2017
The US Dollar was again the flavour of the day on Tuesday as investors bought more US Dollar assets with expectations continuing to rise that the US Fed will increase the official cash rate again in coming months. Durable Goods data released showed US consumers increased their spending on big ticket items beating market estimates and giving the Fed more reason to lift rates. Traders were also expecting to hear some good news from Donald Trump on his tax reform program. It’s been all about the rising US Dollar and falling Euro this week
The RBNZ this morning left the official cash rate on hold as expected and signaled that interest rates would likely remain on hold for the foreseeable future saying numerous uncertainties remain. It was Graham Wheelers final statement as Governor of the RBNZ and his deputy Grant Spencer will take over the reins. The Kiwi Dollar initially fell on the news, however, I expected the cash rate of 1.75% at the RBNZ is likely as low as they will go. At least 5 of the 8 Central Banks we follow are all expected to raise their official cash rates in 2018 with Japan likely to be the last to move on rates in coming years. Traders expect the RBA, BOC, US Fed, BOE and ECB all to tighten monetary policy in 2018 with the RBNZ, BOJ and SNB lagging behind the new interest rate curve back higher.
The Euro vs US Dollar continued to fall on Tuesday after closing a daily candle below the Daily Trading Plan’s Trend Change Price of 1.1817. The AUD v USD also fell sharply after also closing a Daily Candle on Tuesday Below the Daily Trading Plan’s Trend Change Price. That trend has continued this morning with the AUD v USD threatening to break below 0.78c before the end of the week.
After initially gaining strength when US markets opened the Canadian Dollar weakened after BOC Governor Poloz was seen to be dovish when he spoke at a press conference on Wednesday. The markets have been pricing in the likelihood the BOC lifts rates again in the coming 6 months and Poloz comments may have been a direct attempt to ensure the Canadian Dollar doesn’t continue to appreciate too quickly.
Today’s economic calendar shows US GDP and German CPI as two of the high impacting data numbers traders will be keen to watch. Thursday and Friday are packed full of high impacting economic news so expect plenty of volatility on currency markets.
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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