By Kymberly Martin
The USD was a little stronger on Friday with European currencies being the key underperformers.
Friday marked another positive night for equities on both sides of the Atlantic as our global risk appetite index (scale 0-100%) has rebounded to 65%.
Oil and gold also made notable positive returns.
The focus for the US equity market in coming weeks will be the S&P500 Q1 earnings reporting season that has just kicked off. Any sign earnings growth is fading, as the labour market improves and USD strengthens, could undermine a key support for US equities of recent years.
With a relative dearth of data on both sides of the Atlantic on Friday night, the EUR resumed its general drift lower. As German bond yields flirt with historic lows the EUR/USD ended the week just above 1.0600. Support is now eyed at the mid-March lows of 1.0460. CFTC data of speculative currency positions to 7 April (published Friday), showed there has been a slight pull-back in net EUR shorts from the prior week’s record.
The GBP/USD’s descent on Friday night was assisted by the disappointing Feb UK industrial production release. The GBP/USD ended the week at 1.4630, its lowest levels since June 2010. The broader issue ahead remains the UK General election (May 7) that may continue to weigh on the GBP in coming weeks.
NZD/USD once again made a bid for the 0.7600 level early on Friday afternoon, but failed.
A general downward trend then set in until the NZD/USD ended the week at 0.7540.
We are still hopeful of getting a more sustained move above 0.7600 to enter a short NZD/USD position ahead of the anticipated low-side reading of Q1 CPI on 20 April. We would be targeting a move back down to 0.7200 in the first instance, although our end-year target remains at 0.7000.
On the crosses, the NZD/JPY was notably weaker on Friday. From 91.50, the cross ended the week at 90.60.
Look out today for the Bank of Japan’s Minutes from its mid-March meeting, for any hints of when further easing may be forthcoming. The Bank is still struggling to meet its 2% inflation target.
The NZD/AUD has also slipped a little further from its recent close-encounter with parity. It ended the week at 0.9800. It is a fairly quiet start to the week on both sides of the Tasman.
This week’s NZ and AU highlights will be tomorrow’s NZ Q1 Quarterly Survey of Business Opinion and Thursday’s AU employment report. For today we see NZD/AUD support at 0.9780 and resistance at 0.9850.
To subscribe to our free daily Currency Rate Sheet and News email, enter your email address here.
Daily exchange rates
Select chart tabs
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.