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Depth ForexTuesday, September 19th, 2017 at 11:06am

Daily Forex Commentary

Australian Dollar
The Australian Dollar fell 40 basis points during the American session to post a fresh 2-week low. During the Asian session, the pair tested the 0.8030 resistance level before ultimately turning to the downside. Opening this morning at 0.7960, the Aussie was hit on multiple fronts with mixed Chinese money data weighing on the Australian Dollar. The bearish outlook was further exacerbated by the sharp decline in the Canadian dollar, triggering a further sell-off in both commodity currencies. With the ‘Quantitative Tightening’ announcement widely expected to be released this Thursday, policy makers and indeed traders are positioning themselves for a world with higher borrowing costs, strengthening the outlook of the Greenback and in turn weighing on its counterpart the Aussie. With a quiet day on the domestic economic calendar, investors are treading water ahead of an action-packed Thursday.

New Zealand Dollar
The New Zealand dollar is weaker this morning when valued against the Greenback. The Kiwi reached an overnight high of 0.7343 before falling 0.5% for the day to 0.7250, almost a full cent off its high. The USD strength came as the market now expects the Federal Reserve to announce on Thursday the beginning of “quantitative tightening”, with its balance sheet expected to begin shrinking from next month, as the Federal Reserve keeps its options open for a possible interest rate hike later this year in December. Westpac Consumer Sentiment was released this morning which softened to a level of 112.4 in September, down from 113.4 last quarter. The NZD/USD pair is currently trading at 0.7259. We now expect support to hold on moves approaching 0.7240 while any upward push will likely meet resistance around 0.7329.

Great British Pound
The Great British Pound broke lower through trade on Monday, ending a multi-day rally that saw Sterling touch 15 month highs. Sterling slumped back below 1.36 after BoE Governor Mark Carney suggested Monetary Policy adjustments would be limited and gradual. The commentary failed to meet the hawkish expectations of some investors and worried those backing a November rate hike. Falling across the board the GBP touched intraday lows at 1.3466 and open this morning at 1.3494 as attentions turn to Wednesday’s retails sales print and FOMC policy meeting for wider direction moving forward.

Majors
The U.S. Dollar was marginally higher in the lead up to the latest Federal Reserve rate decision on Thursday. The U.S Dollar index (DXY) is currently trading at 92.04 at the time of writing and up 0.2% for the day as markets prepare for the possibility that Fed. Reserve Governor Janet Yellen will announce the scale back of its current balance sheet which sits at $US4.4 Trillion Dollars. European CPI figures came in at expectations of 1.5% on an annual basis with the EUR/USD steady at 1.1950. The Greenback rose to a seven week high of 111.66 against the Yen yesterday as Japan observed a public holiday and investors positions themselves for the latest central bank meeting. The CME Fedwatch tool is currently pricing a 62% probability of a further interest rate rise by the Fed reserve by the end of 2017.
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Depth Forex
Depth ForexMonday, September 18th, 2017 at 11:22am
Daily Forex Commentary

Australian Dollar
The Australian Dollar closed the week lower against the US Dollar despite Thursdays strong local labour market data. The AUD/USD pair bounced off lows of 0.7986 and touched a high of 0.8034 as investors remained focused on this week’s upcoming U.S Federal Policy announcement. Hopes that the two-day meeting may provide further hints about the central banks plans for tightening rates caused a shift in sentiment. The Aussie opens just under 80c this morning and with the absence of any local top tier data, the Aussie is likely to find resistance around 0.8050, with support levels at 0.7940.

New Zealand Dollar
The New Zealand dollar closed the week on a strong note against the greenback on Friday reaching a high of 0.7309, up 0.96% for the session. There were no significant data releases on Friday in New Zealand so the rally was on the back of weaker than expected US retail sales and overall market risk sentiment. We are predicting another quiet day ahead in New Zealand with no scheduled data releases. The NZD/USD pair is currently trading at 0.7298. We now expect support to hold on moves approaching 0.7240 while any upward push will likely meet resistance around 0.7329.

Great British Pound
The Great British Pound surged to its highest point since the Brexit vote in June last year to close out last week hitting a high of 1.3615. Opening this morning at 1.3584, the Pound posted an impressive increase of 1.5% as MPC members continued to surprise the market with their hawkish sentiments. The catalyst being MPC Vlieghe, a noted dove indicating that a rate hike is possible in the coming months. On the back of this surprise statement, the Market has now priced in a 65% chance of a rate hike in November, up from a 3% chance last week. The Sterling now looks to its Cable counterpart for further direction this week with a relatively slow domestic economic calendar.

Majors
The greenback rally after a stronger than expected United States inflation print halted on Friday evening. The Latest Retail sales figure fell for the month of August while industrial output saw its biggest drop since 2009 as Hurricane Harvey and Irma expects to have further impacts on the American economy over the coming months. The news sent the DXY lower, closing 0.23% lower for the day with equities flat. The EUR/USD cross tested weekly highs of 1.1985 on Friday evening, falling back to 1.1920 on close as the common currencies next movements will be seen this evening on the release of Eurozone inflation for the month of August. With a risk on environment we saw USD/JPY push to an intraday high of 111.32 before pulling back to 110.80 following the release of American macro data. We expect light on trading today as Japan pauses for a public holiday.
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Depth Forex
Depth ForexFriday, September 15th, 2017 at 11:40am
Daily Forex Commentary

Australian Dollar
The Australian dollar enjoyed mixed fortunes through trade on Thursday as investors toyed with moves back through 0.80 US Cents. The currency rebounded early following stronger than expected labour market data, where in, 54,000 new jobs were added amid strong growth in full time employment and participation rates. The Aussie bounced through 0.80 and touched intraday highs at 0.8016 before softer than anticipated Chinese macroeconomic data sets curb upward momentum and investors squared positions leading into an all-important US inflation print. A steady read in core inflation and an uptick in wider consumer prices bolstered the USD and sent the Aussie back below the psychological 0.80 handle to touch intraday lows at 0.7960. Having corrected upward into the open the Aussie now buys 0.7997 US cents as attentions turn to a raft of US activity indicators headlined by Retail Sales. Watch support on moves toward 0.7960 and profit taking on moves through 0.8010.

New Zealand Dollar
The New Zealand Dollar saw a drop of sixty basis points from its high over the past twenty-four hours as an increase in the United States inflation reading sent the Greenback higher. Opening at 0.7245 against its American counterpart, the 0.72 handle was tested in overnight trading with an intraday low of 0.7185. Losses were eventually paired as investors domestically focus on the upcoming election where the latest opinion poll showed a 4% lead by the Labour Party. The New Zealand dollar opens this morning at 0.7230 ahead of the latest release of the Business NZ Manufacturing Index

Great British Pound
The Great British Pound contained its upward trajectory against the USD dollar touching a fresh one year high of 1.3405 as the Bank of England Governor Mark Carney said in an interview that the possibility of a rate hike has increased. As widely expected the BoE kept UK interest rates at 0.25% but the hints of rise caused the Pound to rally by as much as 1% against the Greenback. With unemployment reaching 42-year lows and signs of household consumption stronger than expected, If the economy continues to strengthen, we could see a rise as early as December.

Majors
The greenback got a limited boost from local data overnight as the consumer price index rose by 0.4%, versus the 0.3% expected, in the month of August on a seasonally adjusted basis. Core CPI (YOY) came in at 1.7%, matching July's figure, but above the 1.6% estimated. Acceleration of inflation may force the FOMC members to vote in favour of another interest rate hike in December and that will add further strength to the greenback. Looking ahead tonight and attentions will turn to monthly U.S. Retail Sales for August with market expectations of a 0.3% increase in headline retail sales.
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Depth Forex
Depth ForexThursday, September 14th, 2017 at 11:16am
Daily Forex Commentary

Australian Dollar
The Australian dollar tracked sideways through much of the domestic trading session on Wednesday holding onto to gains above 0.80 U.S cents. With little domestic data on hand to drive direction investors seemed content in managing positions ahead of a busy macroeconomic docket. Having touched intraday highs at 0.8044 the AUD then suffered at the hands of renewed USD demand. Reports Trump and republicans are attempting to fast track key tax reforms, chasing a bipartisan agreement to ensure support and success through the house bolstered the world’s base currency and fostered widespread gains across most major currency counterparts. Slipping back below 0.80 and opening this morning at 0.7984 attentions turn to key domestic labour market data and headline U.S inflation numbers for direction into Friday and the

New Zealand Dollar
The New Zealand Dollar maintained its sideways range over the past twenty-four hours as it again could not push through the 0.73 handle against the US Dollar. Opening at 0.7285, the Kiwi saw an intraday high of 0.7303 after a stronger NZ FPI number in the morning before pulling back to 0.7220 on broader greenback strength in overnight trading. With a lack of domestic data, markets will focus on the upcoming Inflation reading in the Unites States as the New Zealand Dollar opens this morning at 0.7245.

Great British Pound
The Great British Pound treaded water in overnight trading, oscillating between a low of 1.3186 and a high of 1.3328 to open this morning stagnant at 1.3205. With the broader narrative of the Bank of England reviewing their monetary policy on the cards tonight, Traders have taken a wait and see approach this morning with the Sterling trading within a tight range. Despite strong inflation data and a fall in unemployment, the UK experienced slow wage growth further exacerbating consumer spending numbers and undermining the case for interest rate tightening. While the Bank of England is expected to hold interest rates at 0.25% tonight, pundits look forward to a potentially important Policy Statement for direction on the domestic front.

Majors
The greenback closed marginally higher again overnight when valued against most of its major rivals. The greenback rallied following the lead of US Treasury yields and President Donald Trump's promise of lower corporate taxes. There was no official announcement from the President with all messaging coming from President Donald Trump’s twitter account. Yesterday the only U.S. data release was monthly producer price index. U.S. producer prices rebounded in August driven by a surge in the cost of gasoline. The result was below market's expectations albeit lifting by 0.2%. All attentions now turn to the release of today’s consumer price report for August which should be stronger with Hurricane Harvey driving up gas prices last month. A strong result could certainly extend the USD rally.
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Depth Forex
Depth ForexWednesday, September 13th, 2017 at 11:16am
Daily Forex Commentary

Australian Dollar
The Australian dollar held a relatively tight 50-point range through much of Tuesday having found support on moves toward 0.80 U. S cents. With little macroeconomic data to steer direction the Australian Dollar bounced between intraday lows at 0.8001 and session highs at 0.8050 as investors simply squared positions and risk appetite crept back into the market. Despite easing tensions with North Korea and the softening of Hurricane Irma investors were wary of extending USD gains. The bearish channel remains intact and CPI inflation data poses a significant risk to short term positioning. Attentions remain squarely fixed on Thursday Domestic labour market print and U.S inflation read as key markers and possible catalysts driving an immediate directional shift.

New Zealand Dollar
The New Zealand dollar moved higher in the domestic session yesterday, benefitting from the latest opinion polls in the lead up to the general election on September 23rd. Opening at 0.7250 against its American counterpart, the Kiwi drifted off to an intraday low of 0.7220 before surging higher after the Newshub poll suggested an increase in lead for the National Party to 47.3%. The NZD/USD cross hit eventual highs of 0.7320 rallying a full cent. The New Zealand dollar opens at 0.7285 ahead of the latest Food Price Index figures due for release this morning.

Great British Pound
The Great British Pound found upside when valued against its US counterpart over the past 24 hours, trading as high as 1.3298 versus the US Dollar a level not witnessed for one year. The main catalyst for the move was a jump in the inflation rate more than markets had forecasted, according to the Office for National Statistics the rate jumped from 2.6% to 2.9% last month which puts pressure on the Bank of England to start tightening their monetary policy rate. The GBP/USD pair may continue to find support with today’s release of UK Average Earnings Index and the Unemployment rate, investors are hoping to see a rise in average earnings in July of 2.3%.

Majors
The greenback closed marginally higher again overnight when valued against most of its major rivals. The greenback rallied following the lead of U.S. stocks as the mood stayed positive on global markets overnight. The S&P500 closed at a new record high on Tuesday. The index closed the session at 2,496.48, a gain of 0.3 percent, notching intraday and closing records. In other US news overnight damage estimates for Hurricane Irma, a storm that was once a Category 5 hurricane, were broadly lowered. Today on the US macroeconomic calendar will see the release of monthly US Producer Price Index (PPI) for August. In the Eurozone we saw a very quiet night with no data releases. Today will be similar with the only release of monthly German Inflation for August. The EUR/USD currency pair reached an overnight low of 1.1926, currently trading at 1.1966. We now expect support to hold on moves approaching 1.1920.
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