AUD/USD: 0.8810EUR/USD: 1.2830A big day on all markets today, with major moves seen after the soft US Retail Sales increased concerns over the global growth outlook, potentially further delaying any rate rise from the Fed. The US$ is under considerable pressure, as are stocks and oil, which saw another steep sell-off before a late bounce. Today sees the EU CPI as well as a Mario Draghi speech, which may give the dollar a short reprieve ahead of the upcoming US data (I.P./ C.U./ Philly Fed Mfg survey) but if that repeats the underwhelming retail sales release from the US, then the dollar and stocks will be in further trouble.
The Aud spiked higher following the US data release to hit a 0.8860 high before a bounce in the US$ to sit at 0.8780 at the end of the NY session and then squeezing back to 0.8800 in early Australian trade.
Today will look to the Consumer Inflation Expectations as well as another speech from the RBA’s Debelle for guidance. China New Loans are also due for release.
0.8825 will again see sellers ahead of 0.8860 and possibly 0.8900.
The downside will find buyers at 0.8770, 0.8750, 0.8720 and 0.8700 although yesterdays low at 0.8674 now looks to be out of site, for the next session or two at least.
Choppy trade with a mild near term upside bias appears to be the most likely outcome, although gains may be limited if the risk-off move continues in the stock markets which may eventually flow through to the Aud. In the mean time it appears that investors are happy to earn the yield and let the markets do the work.
Economic data highlights will include:
Consumer Inflation Expectation, China FDI/New Loans
Jim LanglandsFX Charts www.fxchartsdaily.com
