Both the AUD USD and NZD USD are posting gains this morning followingfriendly comments from Reserve Bank of Australia Governor Stevens whostated that it may be appropriate to raise interest rates.
Both the AUD USD and NZD USD are posting gains this morning following friendly comments from Reserve Bank of Australia Governor Stevens who stated that it may be appropriate to raise interest rates.
As the week winds down, the focus today will be on two Forex markets which formed closing price reversal tops last week and one that made a reversal bottom. This week the EUR USD, GBP USD and USD CAD confirmed their technical reversals from last week.
Fundamentally, an unexpected improvement in Euro Zone economies during the second quarter helped firm the Euro yesterday, but overnight news about weaker consumer prices in the Euro Zone has the Euro under pressure. Today’s U.S. reports regarding CPI and consumer sentiment are likely to set the tone of the day.
Last week’s announcement by the Bank of England to expand and extend its quantitative easing program is still weighing on the minds of traders. This bearish news helped put in the top last week in the British Pound that led to follow-through selling this week. The news yesterday that the French and German economies unexpectedly grew during the second quarter helped trigger a short-covering rally because of increased optimism, but overnight it looks as if this news was not enough to combat last week’s more bearish BoE decision.
The key as to whether this market continues its down move will be today’s U.S. economic data. Weaker consumer sentiment is likely to hurt the Canadian Dollar. A better than expected number should trigger renewed appetite for risky assets which should help the Canadian Dollar rally.