Forex Afternoon Wrap – 03/11

Nov 03 2015, 1:05 pm

RBA leaves cash rate unchanged at 2.0%

  • ANZ Commodity prices m/m 6.9% vs. 5.5% previously
  • RBA leaves cash rate unchanged at 2.0%
  • Spain unemployment change 82.3k vs. 70.3k
  • UK construction PMI 58.8 vs. 58.9


  • US Factory orders
  • IBD/TIPP Economic Optimism
  • New Zealand GDP Price Index
  • US Total Vehicle Sales
  • ECB President Draghi’s speech
  • New Zealand unemployment rate
  • New Zealand employment change

The Reserve Bank of Australia kept interest rates unchanged at 2.0% and struck a fairly neutral tone. Albeit leaving the room open for further rate cuts, the RBA’s decision came as widely expected and joins the ranks of the BoC and the BoJ which were other Central Banks which left monetary policies unchanged. The Australian dollar rallied on the news rising 0.37% against the Greenback ahead of the US trading session. AUDUSD posted a daily high to 0.7218, marking a three day high before easing back to trade at 0.717 at the time of writing. The Kiwi dollar remained weak losing -0.59% to the US Dollar. Important data awaits the NZD as the Global dairy trade index data is due for release followed by the quarterly employment numbers from New Zealand later in the evening.

The Japanese Yen is soft today as USDJPY gained 0.09% for the day, trading at 120.87. With no major news releases the markets were trading largely flat into the European trading session.

Data from Europe included the Spain unemployment changed which came out at 82.3k against estimates of 70.3k. The Euro remained weak for the most part of the day falling to session lows of 1.096 before managing to trim some of the losses against the Greenback.

From the UK, construction PMI came out nearly as expected, rising 58.8, missing estimates of 58.9 by a very small margin. The British Pound was however subdued today compared to yesterday’s rally on a strong manufacturing PMI data. GBPUSD is currently down -0.16% for the day trading at 1.539 after a brief rally to 1.544 which saw the currency give back its gains.

The US trading session is largely expected to remain quiet with the exception of the US factory orders and the IBD/TIPP Economic optimism data due for release. The USDCAD is up 0.16% as the Canadian dollar continues to post decline for the second consecutive.

ECB President Mario Draghi is due to speak today at the Frankfurt ECB forum conference and the markets will be closely tuning into what Mr. Draghi will have to say in terms inflation and the prospects of QE expansion in December. The Euro has been trading flat largely across the board with the exception of the US Dollar and the sideways markets are likely to see some reaction to Draghi’s comments on the economy and monetary policy, if any.

On the commodities front, Gold futures are down -0.19% for the day, posting a 3-week low at 1131.7 at the time of writing, while WTI Crude Oil futures are relatively stronger with gains 0.82%, trading at $46.46.

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John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.

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