Market Update 6/08/2024

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

Global markets remained unstable due to ongoing concerns about the US economy, leading investors to be more cautious. Stock markets around the world experienced significant declines. Specifically, Japan’s Nikkei index fell by 12.4%, its largest drop since 1987. In the US, the S&P 500 decreased by 3.2%, while in Europe, the Euro Stoxx 50 dropped by 1.4%, and the UK’s FTSE 100 was down by 2.0%. Additionally, the yield on the US 10-year bond fell by 2bps to 3.77%, indicating increased demand for safer investments.
 
The US ISM services index increased by 2.6 points to 51.4 in July, slightly exceeding market expectations of 51.0. However, this small beat didn’t significantly change the overall market sentiment. Production rose by 4.9 points, new orders increased by 5.1 points, and employment improved by 5.0 points. Prices also firmed up, rising by 0.7 points.
 
The USD kept weakening as the yen outperformed other G10 currencies.
 
NZDUSD experienced a sharp drop in early European trading, falling quickly to a new low for 2024 at around 0.5850. Despite this, it soon recovered, with the NZD ending only slightly weaker against the USD. Recently, the selling of risk assets has kept the NZD from rising above 0.6000. However, since the market expects the Reserve Bank of New Zealand (RBNZ) to follow the US Federal Reserve’s actions, there’s a strong possibility that the NZDUSD might rise above this level, aiming for a long-term target of 0.6180. The current support level is at 0.5920, and resistance is at 0.5985.
 
NZDAUD has stayed mostly steady around 0.9140. Due to a bank holiday in Sydney yesterday, trading activity was pretty low. The reduced expectations for Australian interest rate hikes have helped maintain the exchange rate above 0.9120 over the last 24 hours. The support level is at 0.9120, and the resistance level is at 0.9180.
 
NZDJPY dropped to the low 83’s overnight but has since recovered to above 85.00. The yen has been performing well compared to other safe-haven currencies in the FX market. The USDJPY started near 146.00, fell below 142.00, but has since rebounded as market sentiment has calmed.
 
There is no domestic data scheduled for today. The RBA is widely anticipated to keep its policy rate steady at 4.35%. It’s interesting to note how quickly the market’s expectations have shifted, just a few weeks ago, there was talk of a potential rate hike, but now the focus is on maintaining the rate, with a possible cut by the end of the year. Attention will be on the updated forecasts and Governor Bullock’s remarks during the press conference. Later in the evening, Euro Zone retail sales and the US trade balance will round out a relatively quiet day for data.
 


Here are the latest mid-market rates:

NZD/USD 24 HOURS 

Disclaimer:

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.