U.S. Dollar. Our bias BEARISH, we’ll be looking to sell on rallies.
• U.S. Dollar Index closed on Friday at 75.08, following a week of steady gains
• S&P500 rose +0.3%, the DJIA gained +0.6% while the NASDAQ added +1.6%
• Fridays NFP was a shocker, delivering an anemic +18K gain versus expectations for +105K
• Euro-zone debt crisis & end of QE2 expected to be marked drivers of Dollar price action going forward
• Retail sales, PPI reports & June CPI reports due this week
• U.S. Dollar Index support at 74.00, resistance 75.85
• We remain bearish U.S. Dollar in the week ahead and will look to sell on rallies.
Euro. Our bias NEUTRAL, on the sidelines till a clearer picture develops.
• Euro closed last week at 1.4262 against the U.S. Dollar after being rocked by a Portuguese credit rating downgrade and a notable deterioration in Euro-zone bond spreads
• Greece receives 3.2B Euro aid package from IMF
• S&P rating agency says any private investors roll over Greek bond holdings: “they would rule any such action as a default”.
• Markets concerned over Euro-zone sovereign debt crisis spreading to Italy - the 3rd largest economy behind Germany and France
• ECOFIN meetings & European Bank Stress Test Results scheduled for this week
• EURUSD support at 1.4175, resistance 1.4450
• We remain neutral Euro in the week ahead until a clearer picture emerges with risk trends.
Japanese Yen. Our bias NEUTRAL, on the sidelines till a clearer picture develops.
• Japanese Yen strengthened into Fridays close, finishing at 80.54 against the U.S. Dollar on risk aversion flows following dire U.S. NFP jobs report
• U.S. Treasury bonds fell 8 bp against Japanese bonds after jobs report
• USDJPY price action likely determined by wider global sentiment this week
• USDJPY support at 79.80, resistance 81.25
• We remain Yen neutral in the week ahead until a clearer picture develops with risk trends
British Pound. Our bias BEARISH, we’ll be looking to sell on rallies.
• Sterling ended last week at 1.6054 against the U.S. Dollar after poor NFP report
• CPI, RPI & employment reports due this week
• Credit Suisse Overnight Swaps factoring in only 20bp in hikes for the next twelve months
• GBPUSD support at 1.5950, resistance 1.6140
• We remain bearish Sterling in the week ahead and will look to sell on rallies
Canadian Dollar. Our bias NEUTRAL, on the sidelines till a clearer picture develops.
• Canadian Dollar finished last week down against every other major currency apart from the Euro
• Canadian economy added 28.4K jobs in June (15.0K exp.)
• Housing starts & manufacturing sales reports due this week
• 3.2% chance of a 25.0bp rate hike, ahead of the July 19 BoC meeting according to the Credit Suisse Overnight Index Swaps
• USDCAD Support at 0.9540, resistance 0.9680
• We remain Loonie neutral in the week ahead until a clearer picture develops with risk trends.
Australian Dollar. Our bias NEUTRAL, on the sidelines till a clearer picture develops.
• Australian Dollar closed last week at 1.0752 against the U.S. Dollar and may trend sideways in the week ahead
• RBA held rates at 4.75% last Tuesday on wider global growth concerns
• Credit Suisse Overnight Index Swaps see RBA holding rates for the next 12 months
• Quiet economic calendar this week will see Aussie price action determined by wider global sentiment
• AUDUSD support at 1.0650, resistance at 1.0790.
• We remain Aussie neutral in the week ahead until a clearer picture develops with risk trends.
New Zealand Dollar. Our bias BULLISH, we’ll be looking to buy on dips.
• New Zealand Dollar rallied to a fresh record high of 0.8370 last week against U.S. Dollar
• 2Q 2011 GDP report due this week
• Credit Suisse Overnight Index Swaps show 75bp over the next 12 months from RBNZ
• NZDUSD support at 0.8300, resistance n/a
• We remain bullish Kiwi in the week ahead and will look to buy on dips.