Welcome to our daily market update, where we help keep you informed on the latest happenings in the world of FX.If you have any questions or would like anything further explained, please don’t hesitate to reach out to your account manager or email info@cafx.com
Last week concluded with a subdued session. The Dow Jones climbed 1%, while the S&P 500 and Nasdaq saw modest gains of 0.3% and 0.2% respectively. U.S. 10-year yields held steady at 4.41%, and crude oil prices rose 1.5% to $71.10 per barrel. The AUD/USD pair fluctuated between 0.64715 and 0.6521, ending the week at 0.64985.
Asian markets presented a mixed picture on Friday. The Shenzhen and Hang Seng indices fell by 3.1% and 1.9% respectively, while the Nikkei rose 0.7%. Australia’s ASX gained 0.9%, buoyed by a 2.3% increase in energy stocks. The AUD/USD reached a high of 0.6521 during midday trading before settling at 0.6488 by the session’s end.
European equities opened slightly higher, despite disappointing UK retail sales and German GDP data. The U.S. 10-year yield remained stable around 4.41%, while Brent crude climbed to $74.80 per barrel. EUR/USD briefly touched 1.0498, while GBP/USD slipped to 1.2552.
French and German PMIs underperformed expectations, with composite measures at 44.8 and 47.3 respectively. The Eurozone’s composite PMI also disappointed at 48.1. Comments from ECB’s Guindos led markets to price in a 50% probability of a 50bps rate cut at the ECB’s December meeting.
The EUR/USD pair experienced a sharp decline, dropping below 1.0400 and eventually reaching a low of 1.0332. This triggered a broader dollar rally, affecting other major currencies. GBP/USD briefly dipped below 1.2500, while AUD/USD and NZD/USD also saw significant drops. USD/CAD rose to 1.4020, though USD/JPY remained relatively stable around 154.80.
During London’s midday trading, the euro recovered slightly to 1.0420. GBP/USD continued to struggle around 1.2515 as UK PMIs remained weak. The Australian and New Zealand dollars regained some ground, while European equities turned mostly negative, with the FTSE being one of the few indices maintaining gains.
Canadian retail sales for September met expectations with a 0.4% monthly increase, while the core measure surpassed forecasts, rising 0.9%. The USD/CAD pair showed little reaction to this news.
In the U.S., November’s Services PMI exceeded expectations, rising to 57.0, while Manufacturing PMI slightly missed the mark at 48.8. The Composite PMI increased to 55.3, surpassing forecasts. The University of Michigan Consumer Sentiment Index for November was revised down to 71.8, lower than anticipated.Market reaction to these data releases was muted, with most major currency pairs trading near the middle of their ranges. USD/JPY briefly surpassed 155.00, standing out as an exception.
Upcoming Events to Monitor:
• New Zealand: Q3 Retail Sales (excluding inflation)
• New Zealand: October Trade Balance, Exports, and Imports
• UK: Speeches by BOE’s Lombardeli and Dhingra
• Canada: Bloomberg Nanos Confidence Index
• US: October Chicago Fed National Activity Index
• US: November Dallas Fed Manufacturing Activity
• EU: Speeches by ECB’s Lane and Makhlouf
Mid-market rates.
| Currency Pair | Mid-market rate |
| AUD/USD | 0.6531 |
| AUD/NZD | 1.1152 |
| AUD/JPY | 100.79 |
| AUD/CNH | 4.7330 |
| AUD/EUR | 0.6234 |
| AUD/GBP | 0.5190 |
| AUD/HKD | 5.0834 |
Chart of the day
The market update provided by Corporate Alliance FX (CAFX) is for reference only and does not constitute a bid, levy, offer or invitation to offer for the financial product, the basis for any contract or commitment, a recommendation for the purchase or sale of any investment instruments, financial, legal, tax, investment advice, investment advice or other opinions. It will not be legally liable for any consequences or losses caused by the information or content involved.
Corporate Alliance Group Pty Ltd T/A Corporate Alliance FX (CAFX) (ABN 58 167 119 226, AFSL 523351) (i.e. CAFX), CAFX independently holds the Australian Financial Services licence no. 523351 (AFSL), so CAFX is regulated by the Australian Securities and Investment Commission (ASIC) and, and although ASIC is a strictly regulatory body, it does not endorse a specific financial product. ASIC’s regulation of CAFX applies to all services under the financial licence held by CAFX, including the issuance of foreign exchange settlement, foreign exchange payments, foreign exchange risk control, hedging, market making and providing financial advice.3
