Today’s Key Market Drivers – 6th October 2017
Overnight the Pound broke down through some key technical levels after traders took a dim view of the British PM’s latest speech, weak economic data and the fact Brexit negotiations are not moving smoothly. A potential new trend direction has been triggered according to our Daily Trading Plan. The Daily Trading Plan is showing a number of key technical levels on currency crosses are getting close to being triggered and with the US Non-Farm Payrolls data due tonight a push higher on the Yen could push 5 Yen crosses through trend direction change prices to the downside.
US Durable Goods and Factory Orders beat the market’s estimates when released on Thursday, which continues to point towards improving economic growth and the likelihood of the US Fed raising rates at its December meeting. Futures traders are now pricing in an 86% chance the US Fed lifts the official cash rate before Xmas which is 17% higher than this time last week. US exports rose and imports fell in September and if Donald Trump’s tax cut plans sail through Capitol Hill then the market is going to want to buy more US Dollar assets which will only underpin the US Dollars rise higher. Traders are expecting less than 100,000 jobs were created in the US in the month of September due to the two hurricanes that lashed Texas and Florida. If the official jobs number for September shows 100,000 + then I would expect the US Dollar will be supported post the data release at 11.30pm Sydney time this evening. If the number is below 100,000 then I suspect the market will consider this acceptable due to the devastating hurricanes. I just don’t see a high probability the US Dollar will be sold heavily on a weaker than expected jobs number.
The AUD v USD is off its high of 0.8124 by some 3.5c now and trading at 0.7790 this morning. The low of the year is around 0.7180 and there is every indication both technically and fundamentally the local currency could continue to move lower against the greenback between now and when the US Fed does actually raise the official cash rate likely in December. The local Aussie stock market has been stuck in a range all of 2017 and if it breaks this range to the downside between now and Xmas then the AUD will likely fall along with it.
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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