Data/Event Risks
Data and event risks are on the low side for Friday. Just US trade balance data which could be dollar positive if drastically better than the USD 46 bln deficit expectation.Â
Idea of the Day
The Aussie is feeling a little soggy towards the end of the week, having made 3 ½ month lows vs. the USD. The central bank, in their latest quarterly report, suggested that further weakness was likely in the economy over the coming year (especially beyond mining), although this still means growth of around 2.5% which is a level that most of Europe is still way off achieving. Still, with the Aussie having broken below the 1.03 level, it could be that longer-term investors look to lighten their holdings. The next levels to watch to the downside are 1.0219 (50% retracement level) and 1.0149 (October 2012 low).
Latest FX News
- JPY:. A steadier tone emerging on the yen for most of this week The sense is that the market has pushed things as far as they dare without fresh policies to stimulate the economy. The BoJ meeting and GDP data will be the main focus for next week.
- EUR:  Suffering through the ECB press conference. The sense was that the President was not as hawkish as some had feared, together with some calming and indirect words on the currency.
- GBP: It was all ears on the incoming (mid-year) Bank of England Governor Carney yesterday. Sterling did well, re-adjusting its perception that he was going to aggressively expand QE later in the year. This has pulled sterling above the 1.5666 Fibonacci level vs. the USD.
- AUD:. A fairly decisive move lower overnight on the back of the latest quarterly report from the Reserve Bank of Australia. This proved to be fairly cautious on the economy, especially beyond the mining sector and this kept alive hopes for further easing. The Aussie was at a 3 ½ month low just below 1.03 vs. the USD.
Further reading:Â AUD/USD Falling Towards Key Support within Trading Range
