Daily FX Trading Review: RBNZ Currency Intervention Confirmed – Sept 29, 2014

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Daily FX Trading Review: RBNZ Currency Intervention Confirmed - Sept 29, 2014

The comdolls gave up more ground to the dollar on Friday, led mostly by FX trading losses for the Kiwi. Earlier today, data from the RBNZ foreign currency holdings indicated that the central bank intervened in August. Prime Minister John Key even mentioned that he’d like to see NZDUSD trade around .6500. There are no other reports due from the comdoll economies today, which suggests that their currencies could move to the tune of risk sentiment.

The US dollar continued to advance against most of its major FX trading counterparts, as data from the US economy came in line with expectations. The final GDP reading was revised from 4.2% to 4.6%, reflecting stronger growth in the previous quarter. Consumer sentiment and inflation expectations from the University of Michigan were unchanged. Core PCE price index and data on personal spending and income are up for release today, with improvements likely to push the dollar higher in FX trading.

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The euro edged lower on Friday, as the German GfK consumer climate index slipped from 8.6 to 8.3, lower than the estimate at 8.5. German import prices saw a 0.1% decline, lower than the projected 0.2% drop. German and Spanish preliminary CPI figures are due today and these could set the tone for the euro zone flash CPI estimates due later this week.

The pound continued to decline against most of its FX trading counterparts on Friday, as there were no reports to give it a boost. For today, UK mortgage approvals and net lending to individuals data is due and strong figures could push the pound higher. Apart from these medium-tier data, the pound might simply rely on market sentiment for price direction.

The franc gave up ground to the dollar but continued to consolidate to the euro, as there were no reports out from Switzerland then. For now, the prospect of FX trading intervention from the SNB is keeping EURCHF afloat but speculations of further ECB easing could provide more volatility for the pair.

The yen weakened to the dollar as Japan released another round of bleak inflation figures last Friday. The national core CPI fell from 3.3% to 3.1% while the Tokyo core CPI dipped from 2.7% to 2.6%. More data from Japan are up for release this week and this could determine whether the economy is really recovering from the sales tax hike or not.

To contact the reporter of the story: James Brennan at james@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.