From the FXWW Chatroom: Benign currency trading day with the U.S. out for Presidents Day Holiday and little in the way of tier one data globally
– The most significant data event was Euro Area Current Account, posting surplus of 29.9bn for Dec and cumulatively 3.5% of GDP
– The backdrop for Euro remains encouraging with solid growth momentum and firming forward guidance from the ECB
– Yields have strengthened across Europe (German 10y +3bp to 0.73%), weighing on European equity bourses (EuroStoxx -0.55%, DAX -0.53%)
– U.S Equities and bond markets are closed, but DJI and S&P minis have also shrugged off the stronger Asian session to print small negative this morning
– Tensions continue between U.S. and Russia, this time over Syria. Russian FM warning Trump administration not to ‘play with fire’, suggesting provocative support for Kurds in Syria could lead to dismemberment of the Syrian state.
– In the absence of U.S Trading, the DXY has been biased to strengthen marginally and has pressured NZD back modestly below 74 cents.
– The big Dollar appears to be in a holding pattern and too early to call any bottom yet, the ANZ Eco Commentary below highlights the key conundrums that are detracting focus from traditional yield differentials.
– Ahead Today: The NZ PPI indexes are out at 10:45am, not typically market moving. In Australia we have weekly ANZ consumer confidence and the RBA minutes at 1:30pm
– NZD is forming reasonable resistance in the 7410-7440 range above, having failed again last night. But for now it feels the bird remains bid on dips while the USD remains soft. Initial support 7350
– NZDAUD is also building firm resistance toward 9350 (AUDNZD 1.0700) but requiring a break back below near term trend support at 93 cents. Despite dropping our (ANZ Eco) call for two hikes from the RBA this year, ANZ remains upbeat the Aussie economy and favours an eventual push back lower in this cross. Watch RBA Minutes as the key data on the day.
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