AUD/NZD update

Hi,

I am travelling this week and next, conducting marketing for my business in New York, Boston (Today) and London next week.  Hence my lack of written work so far this week.

Unfortunately for me, my last stop/loss in AUD/NZD was triggered on Tuesday, near the low, it seems around the time that the RBA August policy meeting minutes were released. Albeit in profit, it leaves me square and missing the rebound in the pair.

I didn’t get back into the long AUD/NZD position since iron ore prices were weaker in the last week and the Chinese economic data were weaker than expected.  The Australian wage cost index was soft as expected. As I noted last week, the monthly consumer confidence was weak, and the underlying components of the NAB business confidence were softer, although the conditions and confidence measures remained strong.

However, I still generally like the trade on the basis that the AUD/NZD longer term valuation still looks cheap and Australia’s external balance is much improved.  NZ politics is still a potential short term weight on the NZD.

The Australian labour data later today is obviously key; I see risk biased towards a stronger than expected number. In general, the RBA and the market appears to have set a low bar for unemployment to improve faster than expected over the year ahead, and labour market indicators and recent activity indicators suggest that the market is under appreciating the current pace of growth.

See my AmpGFX report just sent: RBA holding still waiting for big waves to hit.



Disclosure and Certification

  • The author of this report often has positions in the currencies and securities referenced in the report at the time of publication, or plans to trade in these currencies and securities.
  • The views expressed in this report accurately reflect the author’s personal opinion about the referenced currencies and securities referenced and other subject matter.
  • The report does not contain and is not based on any non-public, material information.
  • The information in this report has been obtained from sources we believe to be reputable and accurate, but we have not independently checked or verified that information.
  • This report is protected by copyright laws. Please do not republish, post or distribute in any way its contents without prior permission from our company.
  • Our Company is incorporated and licensed in Australia to provide only general financial advice. Please see our financial services guide and terms and conditions for use of this report for more information.

Greg Gibbs,
Founder, Analyst and PM
Amplifying Global FX Capital Pty Ltd