Today’s Key Market Drivers – 30th August 2017

Currency markets were dominated on Tuesday by the early morning news that North Korea had fired a missile over Japanese Sovereign waters in a show of defiance and belligerence to recently imposed UN sanctions that threaten to halve North Korean exports. The Yen and Swiss Franc dominated, rallying strongly in the hour’s post the breaking news as did the Euro, which in recent times has been acting as a safe haven currency.

The Euro today will be impacted by the latest inflation report for July and if it beats the markets estimates the upward momentum on the currency will continue. The US Dollar around 8am AEST Tuesday dropped to a 2-½ year low against the Yen and the EUR v USD rallied beyond 1.20 for the first time in over 2 years. Fast forward 18 hours post the North Korean missile launch and the Yen and Swiss Franc have retreated beyond the levels they closed on Monday morning at 7am AEST and US stock indexes closed higher Tuesday evening showing just how resilient traders are to these North Korean missile launches. One trader said this morning “What North Korea did isn’t something the market hasn’t seen before so the odds of a bounce back were high.” The knee jerk selling on the AUD v JPY, which took one of the biggest hits on Tuesday morning reversed through the US trading session and is now back trading above Monday’s pre missile launch levels with traders now looking towards the latest Australian Building Approvals numbers for July, which is due at 11.30am AEST today.

The US Dollar also recovered through the US trading session helped along by a better than expected US Consumer Confidence report. President Trump lifted the nation’s mood as his visited devastated Corpus Christi in Texas, which was seen as a good news story and united the country behind the President for one of the only times during his tenure. Traders will be keen to see what the 2nd quarter US GDP figures show when released today at 10.30pm AEST. The US economy is expected to have grown at an annualized rate of 2.7% when the figure is flashed on Bloomberg screens this evening. The monthly US Private ADP jobs report is due at 10.15pm AEST and can also be a potential market mover for the US Dollar.

The overall market mood is somewhat cautious and the 1# theme in financial markets is certainly North Korea however that will likely change as the week drags on with no less than 11 high impacting data announcements between now and 7.00am Saturday morning when currency platforms close for the weekend.

 

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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