The beginning of the US session marked a sharp change is global risk sentiment with a shift that still has significant momentum. The US dollar and Japanese Yen were the major beneficiaries on the currency front as worries about China’s financial system saw commodities struggle. The Australian dollar was an obvious loser as a default exposure to China and our reliance on commodities has seen it give up 80 pips to hit 89.57 USD moments ago. The tumble versus the Yen was even more defined with 120 pips shed by the Aussie as it dropped down to 92.127 yen.
Whilst risk currencies such as the Aussie, Kiwi and Canadian dollar were all being sold off overnight the other major crosses traded with no close correlation to those movements. The Pound had a solid night after Manufacturing Production moved to 0.4% month on month and peaked at 1.6647 USD at the start of the US session whilst the Australian dollar dropped. The Euro also remained relatively well bid only easing about 20 pips through the US session.
Westpac Consumer Sentiment gauge continues to weaken dropping to a 10 month low which has added to the Australian dollar weakness today. Home Loans data up at 11.30am might give some respite but the overall risk off sentiment is likely to remain a factor today with little data on the horizon today to stimulate a risk play.
The Australian dollar was unable to mount any significant pressure on the Greenback overnight dropping to 90.125 US cents at the start of the US session and only advancing 10 pips through to its end this morning. The Australian dollar drop was driven Monday morning by the drop back of Chinese CPI to 2% year on year on Sunday and further compounded by a reduction in consumer and business loans in China. The Australian dollar has moved ahead of yesterday morning’s open to 93.14 Yen, with an up and down last 24 hours due in part to the safety play back to the Yen being contrasted with uninspiring Current Account and GDP data.
Tensions in Ukraine may be rising but the translation to Euro weakness has not occurred this week so far and it sits higher in the last 24 hours versus the US dollar, Yen and Pound. The traction gained from last week ECB meeting and Mario Draghi’s comments closing the door on stimulus compounded with solid Italian Industrial Production overnight helped the Euro peak at 83.50 Pence. It has managed to trade above yesterday open versus the US dollar and Yen but failed to match highs met before Friday nonfarm payroll high.
Trading this morning has continued on for the quieter US session with not much in the way of volatility across the majors. NAB Business Confidence data will keep the Australian dollar in focus and to see if the short term improvement in the data continues. Stronger Japanese data in 2014 is likely to render the Bank of Japan’s Monetary Policy Statement and Press Conference a non-event with market expectations to changes to the current policy being pushed back a little further in 2014.
On Sunday the 9th of March 2014, the Pepperstone MT4 Server time will move one hour forward to GMT +3 hours.
Pepperstone bases MT4 Server time on “5pm New York”, the internationally recognised end-of-day in the forex markets. The US will be changing to Daylight Saving Time on the 9th of March 2014. With the US turning clocks one hour forward the Pepperstone MT4 Server Time will also move one hour forward.
How does this affect me?
The only noticeable change that you will experience is that the Market Watch time in MT4 will now be set at GMT+3. This might not affect your trading at all – however, depending on your timezone, this may cause the market to open one hour earlier on Monday. The MT4 server time will still open at 0:00 on the charts, this may just be an hour earlier for your time-zone.
If you are using an EA with a GMT offset time, then you must change the GMT offset to +3 just prior to the 9th of March.
Old Server Time – GMT + 2
New Server Time 9th March – GMT +3
Australia’s GDP data release yesterday did not translate into a lasting trend for the Australian dollar and within an hour it was trading lower than it was before the 0.8% quarterly positive read. However by this morning the Aussie it sitting close to where it peaked as the number s hit the market at 89.87 US cents after a night of steady and solid gains versus the Greenback. The Aussie followed a similar pattern against the Yen but is even better performed putting on about 50 pips in the last 24 hours to trade briefly above 92 Yen and it currently sits a few pips shy of the mark in early trade.
The US dollar also made solid gains against the Yen trading as high as 102.5 Yen before a string of disappointing economic data took the wind out of its sails. Firstly we had ADP Non-Farm Employment Change which came in under expectation at 139,000 new jobs with a negative revision to last month’s number. Just over an hour later ISM Non-Manufacturing PMI dropped to its lowest number since September 2010 coming in at 51.6. The double hit accounted for 25 pips versus the Yen and topped off a solid gains for the Pound which put on 70 pips versus the Greenback through the European and US session.
The Euro was the surprise performer overnight and has traded in a super tight range of 40 pips in the last 24 hours. Solid economic releases starting with services PMI improvements in Italy and Europe region matched with outperforming retails sales did little to inspire with tensions Ukraine still worrying the markets with a short term resolution very unlikely.
Federal Reserve Bank of Dallas President Richard Fisher is speaking shortly and he is a known policy hawk who may all for a faster pace to the unwinding of QE in the States. During the Asian session it is all about the Australian economy with Retail Sales and Trade Balance data up at 11.30am. Later tonight we get the central bank double from the UK and Europe.
The Australian dollar continued on from yesterday’s RBA meeting with enough support to hit 89.67 US cents. Even with Governor Stevens labelling the dollar still “high by historical standards” it did little to temper the demand with a key weapon of further rate cuts seemingly now over with a period of on hold expected in the near term. Vladimir Putin also helped risk assets and the Australia dollar with comments that eased some tension, especially as troops that were training were pulled from close to the Ukraine border. The Australian dollar made its most significant gain against the Yen trading as high as 91.6 Yen, a 150 pip gain since early Monday morning.
The US dollar was not quite as impressive as the Aussie but still was able to put on 80 pips versus the Yen amid the easing tensions in Ukraine-Russia standoff but there is still much unrest in the Russian speaking regions. On an economic front it was a night void of key data outside of UK Construction PMI which remained well above 60 but missed estimates not helping the Pound which was sluggish and has slipped close to where it sat this time yesterday at 1.6659 USD.
The Australian dollar has jumped the RBA hurdle this week and straight away today is quarterly GDP with a consensus of a rise to 0.7%. There is still quite a bit of conjecture of what we will see but the Australian dollar remains well bid close to overnight highs. Tonight’s session will be more volatile than last with the Bank of Canada with their own rates decision, retails sales & GDP from Europe and the ADP Non-Farm Employment Change in the States.
Global equities all took quite a pounding through all sessions through the last 24 hours over Russian incursion into the Crimea region of Ukraine and the escalating tensions where early diplomatic measures have so far failed. Currency markets were not quite as active in terms of percentage movements but the Euro obviously was key player as it continued to fall through the last 24hours. It dropped to 1.3726 USD and 139.15 Yen only a few hours ago with the price stabilising through the New York close. The downward bias is sure to remain as the world media focuses its attention and the world waits to see if shots are fired this week. The Euro didn’t get any real boost from the economic side either with Manufacturing PMI from Spain and Italy underwhelming and the net Europe numbers coming in as expected.
The gold price almost certainly benefited from the uncertainty with equities and risk assets with a healthy 2% plus bounce through trading yesterday. It peaked at 1354.66 USD an ounce midway through the US session edging a few dollars lower through the last few hours. The Australian Dollar however did not display any significant fall in line with equities overnight and the risk off safely play with yesterday’s impressive jobs advertisements number helping the AUD recoup all Monday morning losses versus the Greenback.
The reason that the Australian dollar has remained well supported is that it is the first Tuesday of the month and the RBA forward guidance has recently suggested that rate cuts are all but ruled out last month and today’s release at 2.30pm. Coming up shortly today though is Building Approvals and Current Account data at 11.30am.
The opening of currency trading has reflected the economic and international relations risk that has developed over the weekend. Russia’s deployment of troops in the Crimea region has seen a sharp move away from the Euro which has gapped down 60 pips versus the yen and 30 versus the US dollar. Across all currencies pairs the safety play of purchasing Japanese Yen has been evident with the Greenback slipping to 101.6 Yen with it sitting above 20 pips above a fortnight ago lows. The risk off move from an economic point was Chinese Manufacturing PMI which fell month on month to a market expected 50.2. This is the third straight month of falls as the gauge just sits above in an expansionary mode but sets a worrying trend for 2014. The Australian dollar has been an obvious loser from the double risk off effect slipping as low at 88.916 USD and 90.336 Yen respectively on the open of trade.
The Australian dollar has seen some initial respite with the AIG Manufacturing Index edging higher helping improve it 10 pips versus the Greenback in the first hour of trade. From a data perspective that is lowest print in a day that sees a high number of events for the AUD. Coming up before lunch is HIA New Home Sales, quarterly Company Operating Profits and ANZ Job Advertisements and then after midday we have Chinese HSBC Final Manufacturing PMI. The Australian dollar will likely be anchored to the lower side of its trading range as these economics prints come to market with the greatest focus on the China data.
The manufacturing theme will continue on tonight with Europe and the UK releasing their own Manufacturing PMI with both to remain well in expansionary mode. The US also to release their ISM Manufacturing PMI early tomorrow morning with it expected to rebound after dropping for the last 2 months.
The Australian dollar peaked at 90.25 USD as the Asian session came to an end yesterday and from there it steadily declined through the next two sessions, hitting a low of 89.43 USD. The US dollar was favoured through the European session against the major peers and that was further capped off through the US session when US New Home Sales beat estimates and recorded their best month in the last seven. The Aussie net fall was mirrored by the Euro which also slipped 80 odd pips down whilst the Yen remained in a 50 pip range overnight and by this morning there was no net change for the last 24 hours with the Greenback at 102.37 Yen.
Pound trading was a little diverse to the other majors with Quarterly GDP data reflecting first estimates and a quarterly jump in Preliminary Business Investment in the UK helping insulate the Pound from a large drop given the bias to the Greenback overnight. It dropped about 60 pips and has quickly bounced back and recovered 40 pips through the tail end of the US session to 1.6668 USD.
The Australian dollar is reapproaching overnight lows against the Kiwi dollar after New Zealand managed to maintain its trade balance surplus for the second straight month. It was a touch ahead of estimates and has the Aussie at 1.0779 NZD, in what has been a quiet week so far for the pair with the Aussie down three quarters of a cent for the week.
Quarterly Private Capital Expenditure is probably the second most unpredictable piece of Australian data after unemployment data. The median estimate has not come within 0.5% on either side of the actual reading since November 2008 and last year estimates missed the number by an average of more than 3.9%. With the hard to predict gauge up at 11.30am, Australian dollar trading is expected to be a little muted in the lead in before we see a pretty large movement as trading takes off exponentially on the print of the numbers.
Presidents’ Day – Change to Precious Metals trading times
Presidents’ Day is Monday the 17th of February , and on this US bank holiday there will be an early close for Precious Metal trading. There will be no changes to the FX market open hours and Pepperstone will operate normal customer support.
The Forex markets will be open throughout this period but liquidity is expected to be lower than normal. The Gold and Silver Markets will be closed at 20:00 Platform time(GMT+2), and then re-open 5 hours later at 01:00.
Market and Customer Support Opening Times
|Date||Precious Metal Trading Hours||Customer Support Hours|
|17th February||Monday||Gold/Silver close early at 20.00||Full Support and Funding|
|18th February||Tuesday||Gold/Silver reopen at 01:00||Full Support and Funding|
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