The AUD USD posted a strong gain on Wednesday following the news that the Australian economy grew more than expected.  The report showed that Aussie GDP was up 0.6%.  Traders attributed this gain to the positive influence from government stimulus that encouraged consumer spending.  The rally could continue tomorrow as investors may begin to price in the possibility of a rate hike at the next central bank meeting on October 6.  

News that the Australian economy was growing along with generally weak U.S. equity markets helped keep pressure on the NZD USD throughout the day.  A break in U.S. stock markets could trigger weakness in the New Zealand Dollar if demand drops from higher yielding assets.

Oversold technical factors helped boost the GBP USD on Wednesday.  Trading was thin as most major players remained on the sidelines ahead of this Friday’s U.S. Nonfarm Payrolls Report.  Fundamentally, yesterday’s decline in U.K. manufacturing sent a signal that the economy is still contracting.  This means that the Bank of England is not likely to announce an ending to its quantitative easing program at its next meeting on September 10th.

The EUR USD posted a modest gain buoyed mostly by short-covering on light volume.  Traders were reluctant to take big positions ahead of tomorrow’s European Central Bank meeting.  The ECB is expected to announce that interest rates will remain at 1.0%.  In addition, expect the ECB to say that it is encouraged by the recent reports of growth out of the Euro Zone but still concerned about high unemployment and low consumer spending.

The USD JPY continued to weaken as the Japanese Yen has now replaced the Dollar as the main safe haven currency.  Attractive yields in Japanese government bonds have also attracted the attention of global investors.  

Weaker equity and energy markets weighed on the Canadian Dollar on Wednesday.  Trading is expected to remain tight and thin as investors have decided to back away from the markets until they can get direction following Friday’s U.S. Unemployment Report.


Contact Us:
Local: 312-896-3930
Toll Free: 800-971-2440

DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from B.I.G. Forex, LLC and Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.