Aussie Gains Against the US Dollar on Lowe Speech - 26.11.2013

The Australian dollar bounced up yesterday against the US dollar after a long fall from 0.9445 to 0.9119 and rose early today to 0.9201. The Aussie was supported by RBA’s Deputy Governor Philip Lowe saying that the threshold for intervention to depreciate their currency is very high, ruling out previous week comments of governor Glenn Stevens that intervention is possible. The AUDUSD remains in downtrend despite that was supported by other factors as well, like Iran deal on nuclear weapons. We would expect the downside to resume after a correction that could go as high as 0.9268.

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The US dollar against the Japanese Yen eased from 6-month peaks at 101.90 to 101.34 after US Pending Home sales dropped by 0.6% while were anticipated to increase by 2.2%. At the same time BOJ meeting minutes report showed that some members were concerned of the downside risks of the outlook of the economy further weighing on the USDJPY . However the Euro against the Japanese Yen despite easing to 137.05 remains near 4-year high at 137.97 while later today ECB official Joerg Asmussen will speak, the previous week he said that negative deposit rates are possible.

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The Swiss franc seems stronger after yesterday speech of Swiss National Bank Chairman, Thomas Jordan who said that the minimum exchange rate with Euro is a significant tool and would remain in place. The EURCHF made a reversal between 1.2328/1.2320 and is now declining, was lastly seen at 1.2313 , the USDCHF is also in downside bias, currently being at 0.9078 and heading to support at 0.9060.

Looking ahead, we expect UK Inflation Hearing reports, the US Building Permits revealing further data on construction sector and later on we look for US Consumer Confidence data. Concerning equities Hewlett-Packard would announce its Q4 Earnings, EPS estimate stands at $0.99.