22 Sept: S+P lowers China credit rating. Aud$ lower. Draghi, May speeches in focus today.

By | September 22, 2017

 

It has been a mixed session for the currency markets, with the main interest being in the Aud$, which has come under pressure, firstly in Asia yesterday afternoon after the RBA Governor Lowe said that he was in no hurry to raise rates, and then followed later in the day when ratings agency S+P lowered China’s sovereign credit rating by one step to A+, down from AA-, the first rating cut by S+P since 1999. In other currency pairs against the dollar, Sterling is firm, with traders hopeful that a much-anticipated speech from UK PM Theresa May will signal that she wants a “soft” exit for Britain from the European Union. The Euro is a bit higher as the post-FOMC rally fades a little while the Chf and Jpy are steady. In other markets, Gold and Silver both continued to head lower, under pressure from the prospect of a December rate hike from the Fed, while US stocks have also drifted slightly lower.

Friday has the potential to finish the week with some volatility although it is a Japan holiday so Asia maybe a bit quiet. With the NZ election due tomorrow, Kiwi trade will largely be around position squaring, while in Australia the August Building Permits are due. The main event in Europe, and in the US, will be the flash PMIs for September and another speech from Mario Draghi. Also of note will be the speech in Italy from the UK PM, May. Traders are hoping that she will reiterate her plan for a “soft” Brexit, by agreeing to pay 20 billion Euros to the EU during a post-Brexit transition period, but only if the UK retains access to the EU single market. If so, Sterling should remain well underpinned. Have a good weekend.

The levels in this table are a guide only.

CURRENCIES
EURUSD: 1.1940
Res  1.1955  1.1980  1.2000
Sup  1.1915  1.1885  1.1860
USDJPY: 112.48
Res  112.75  113.00  113.15
Sup  112.25  112.10  111.85
GBPUSD: 1.3577
Res  1.3610  1.3655  1.3700
Sup  1.3525  1.3450  1.3480
USDCHF: 0.9704
Res  0.9725  0.9745  0.9775
Sup  0.9685  0.9650  0.9625
AUDUSD: 0.7931
Res  0.7960  0.7985  0.8000
Sup  0.7915  0.7900  0.7875
NZDUSD: 0.7307
Res  0.7325  0.7345  0.7365
Sup  0.7295  0.7280  0.7250
INDICES / COMMODITIES
S&P: 2500
Res  2505  2510  2515
Sup  2495  2490  2485
DJI: 22330
Res  22390  22450  22500
Sup  22300  22250  22200
ASX SPI: 5660
Res  5680  5700  5720
Sup  5640  5620  5605
XAUUSD: 1291
Res  1295  1300  1305
Sup  1285  1280  1275
XAGUSD: 16.95
Res  17.15  17.30  17.40
Sup  16.85  16.70  16.55
WTI: 50.68
Res  51.15  51.90  52.90
Sup  50.05  49.60  49.00