Today’s Key Market Drivers: 9th April 2019
US Dollar falls after another set of negative data numbers.
The US Dollar was weaker on Monday following another set of negative monthly data numbers this time Durable Goods and Factory orders. US Bond Yields also declined meaning investors who are lending the US Government money receive a lower return on investment and this translates into weaker demand for the greenback.
US inflation data and the Minutes from the US Fed’s March meeting will be the next set of High impacting news items for the greenback. Both pieces of data are scheduled for release after the ECB statement and if they come in weaker than the market expects and after a more hawkish ECB statement the US Dollar has the potential to weaken further as the week rolls on.
Short traders square positions ahead of the European Central Bank statement.
The Euro was sold off heavily following the last statement from the ECB in March but as I have been saying for a number of days now the selling pressure has been evaporating and the Euro has been moving off its lows as more weak US data is released and traders square short position ahead of the ECB’s opinion piece (statement) on the European economy. Some economists are predicting we’ve hit the bottom of the downturn in global economic activity and some green shoots are starting to appear. If Mario Draghi mentions anything along those lines in his press conference or statement on Wednesday the Euro will rally strongly.
Provided the ECB doesn’t get dovish and bearish in its assessment of the Euro Area economy I suspect the Euro has some more room to the upside. Technically it’s looking much stronger against all its rivals.
CNBC reports today that traders recently cut long position on the Euro by the most they have in 9 months after European bond yields fell into the negative. That’s exactly what I want to hear, everyone getting overly bearish and exiting long positions right at the time I am getting long. Keep in mind 90% or more of currency traders lose money, even some of the biggest investment banks and hedge funds. When they are overly bearish is just the time I want to get bullish. I want to buy when there is blood on the streets.
Aussie data Tuesday and Wednesday unlikely to boost the Aussie.
Today sees the latest Housing numbers and tomorrow sees the latest Consumer Confidence figures for Australia and it’s my expectation neither of the data numbers will substantially shift the local currency. What will move the Aussie in a big way is the final outcome of the trade talks between the US and China or any suggestion from Trump about how the talks are progressing.
The AUD v USD is stuck trading in a tight range between 0.7065 and 0.7130 and until we see some resolution around the trade talks making money trading the Aussie Dollar will be tough going for the techos.
May continues to negotiate with Labour over a Brexit deal.
The Pound continued to trade sideways on Monday waiting for Theresa May to announce she’s come to a deal with Labour over Brexit and she will have another crack at getting a deal through the UK parliament before Friday’s official EU exit. If a deal can’t be done or an extension granted from the EU the UK will officially crash out of the European Union without securing a exit deal which would highly likely lead to the UK Prime Minister losing her job and the economic and political instability would likely see the Pound initially sold off and then a very strong rally.
Never waste your time trying to beat anyone else. Bust your ass to be a better you.
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 keynote 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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