Safe Haven Currency: GBP is Weaker Against both AUD (1.5535) and NZD (1.8635) Which Saw Sharper Recoveries During The US Session

Daily forex news and safe haven currency pairs

AUD/USD 0.9690 – 0.9780
NZD/USD 0.8085 – 0.8190
GBP/AUD 1.5495 – 1.5565

Australian Dollar fundamental analysis:

The last two days has seen a sharp rise in volatility for the Aussie as Chinese data disappointed, concerns emerged over our own manufacturing sector, before further mixed messages from the Fed saw us correct higher. After the sharp fall seen on Wednesday night, the Aussie continued to drift lower for much of yesterday, as HSBC Chinese PMI data provided further weakness showing contraction with a reading of 49.6 and well below expectations of 50.4.

Clouds also built over our own manufacturing sector with Ford announcing they will be closing all of their local facilities. With Asian and European equities all falling sharply, we appeared to be on the way through 0.96 but comments from Fed member Bullard saw a turnaround in the greenback and we rallied back up through 0.97. This sharp recovery indicates that yesterday's falls were perhaps somewhat overdone while also showing how confused investors have become in regards the Fed's future policies. We open this morning back at 0.9740 against the greenback but with minimal data due today it may be a day of consolidation

New Zealand Dollar fundamental analysis:

With HSBC Chinese PMI disappointing yesterday the Kiwi found itself under further pressure after already dropping sharply against the greenback on Wednesday night. The first contraction in the manufacturing data in seven months had investors pulling out of risk correlated assets like equities and the Kiwi and we reached a low below 0.8020 in late afternoon trade. It seems that markets may have been a little overdone and a turnaround began in US equity markets after better than expected US data which then led to an increase in risk appetite and we managed to recapture most of our lost levels in time for this morning's open. This morning sees local trade balance data due out shortly and we find NZD/USD currently at 0.8115 while AUD/NZD is still trading either side of 1.20 as both currencies take it turns to lose or gain more against the greenback.

Great British Pound fundamental analysis:

The pound has recovered off yesterday's lows following a reversal in the greenback this morning and UK GDP coming in on expectations. The pound followed most other currencies lower during Asian trade yesterday as concerns mounted for global growth with some poor Chinese data and expectations of an early exit from stimulus by the Fed. With UK GDP coming in at 0.3% for the quarter, which was right on expectations, sentiment became more positive for the sterling and we moved back above 1.5050. Falls in the greenback during US trade had us moving back above 1.5100 and we find ourselves at 1.5110 in time for this morning's open. Meanwhile pound is weaker against both the Aussie (1.5535) and the Kiwi (1.8635) which saw sharper recoveries during the US session.
 
Majors currency and global market fundamental analysis :

With the Nikkei crashing in late afternoon yesterday, funds began flowing back into the safe haven currencies of US Dollar and Yen and to some extent Swiss Franc. EUR/JPY fell from 132.75 to 130.25 just prior to the European open while USD/JPY also saw a collapse through 102. This was caused by several factors including Bernanke's comments on Wednesday night, the fall in Chinese manufacturing data along with concerns over the BOJ's current policies. This saw a large fall in sentiment and risk appetite, as Asian and European equities all experienced sharp falls. Heading into the US session, things stabilised somewhat, in part due to yesterday's moves being slightly overdone but also as another member of the Fed weighed in with dovish comments; only adding to the market confusion that has resulted from a week of mixed messages from Fed officials. Meanwhile, data overnight out of Europe and the US was also somewhat positive but not enough to move markets significantly.

Eurozone latest economic data, Eurozone PMI was better than forecast at 47.8 while US new home sales improved 2.3% to 454k and US initial jobless claims dropped 23k. EUR/USD has recovered off yesterday's lows to trade at 1.2930 this morning while USD/JPY has also come back a tad and is currently at 102

Data releases:

AUD: No data today
NZD: Trade balance
JPY:  Speech from Kuroda
GBP: BBA loans for house purchases
EUR: German GDP, German GfK consumer confidence, IFO Business climate
USD: Durable goods orders

Source: ozforex