Daily FX Trading Review: RBNZ Wheeler Talks Down NZD – Sept 25, 2014

Daily FX Trading Review: RBNZ Wheeler Talks Down NZD - Sept 25, 2014

The comdolls suffered a wave of FX trading selling earlier today, as RBNZ Governor Wheeler spoke of the unsustainable trading levels of the Kiwi. He said he is open to exchange rates, leading to speculations of intervention. There are no other reports due from the comdoll economies today, although the recent news of a potential change in PBoC leadership is keeping uncertainty in the markets.

The US dollar regained ground to most of its FX trading counterparts as risk aversion continued to dominate financial trading. Data from the US was stronger than expected as new home sales climbed from an upgraded 427K to 504K, outpacing the consensus at 432K. For today, durable goods orders data are due and the headline figure is slated to print a 17.7% drop while the core figure might show a 0.7% rebound. Weaker than expected data could force the Greenback to retreat while strong figures could lead to more gains.

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The euro struggled to hold steady recently despite weak data from Germany. The latest IFO business climate reading slipped to a 17-year low at 104.7, down from the previous 106.3 reading and lower than the estimated 105.9 figure. This indicates that businesses are not very hopeful about economic prospects in the euro zone’s largest economy. Euro zone money supply and private loans data are due today but these might not have much of an impact on price action.

The pound tried to advance against most of its FX trading rivals as there were no reports released from the UK. Today has the CBI realized sales report due and a drop from 37 to 34 is expected. However, a stronger than expected reading might lead to more gains for the pound. Also lined up for today is a speech by BOE Governor Carney, with upbeat remarks likely to give the pound a stronger boost.

The franc gave up ground to the dollar in recent FX trading as the UBS consumption indicator posted another decline. The index fell from 1.67 to 1.35, indicating weakening consumption. For today, there are no reports lined up from Switzerland, which could leave the franc at the mercy of risk sentiment.

The yen managed to hold steady to the pound but advanced to most of its FX trading counterparts, including the euro and the commodity currencies. Japanese flash manufacturing PMI slipped from 52.2 to 51.7 in September, reflecting a slower expansion in the industry. For today, the services producer price index marked a weaker than expected reading. Inflation reports from Japan are due in the next Asian session.

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.