Euro Stabilizes & AUD Has a Terrible Week
The Australian dollar had an absolutely terrible week, falling four days in a row against the US dollar, Euro and NZ Dollar. Some weak Chinese data also helped keep the Aussie down. The Aussie has gapped down upon the Asian open. The US Dollar overall had some mixed results but retained its strength for the most part. So the weakest currencies across the board were the Aussie, NZL and the Yen as the Euro stabilized with some comments from Draghi; that they are ready to take further action to push ahead for structural reforms for investment and growth. The Euro actually finished higher against the Dollar on Friday and gapped slightly up upon this weeks opening.
This week traders will be focused on Wednesday’s Fed meeting as it will announce its latest Monetary Policy. If the Fed changes any wordings regarding interest rates or tapering, the market could sell off and get ugly. Thursday has the monumental referendum voting day for Scottish Independence. A yes vote would send financial shockwaves around the world and decimate the GBP. The gap between YES and NO vote has narrowed over the weekend and as of this moment is too close to call. Now the Queen is getting involved with her “two bobs worth of sentiment, saying that Scotland should think very clearly about the negatives of a separation.
Stock markets were generally down last week as the Dow and S&P showed slight losses. There were no major sell-offs but just concern over what the Fed will be saying this Wednesday. In Europe, the Dax has been on fire for the month of September but on Friday it also had a down day but again no major selling was involved. Europe has only one major announcement coming out this week on Tuesday, the German ZEW Economic Sentiment, a survey of 275 German Investors and analysts relating to a 6 month economic outlook for Germany. This can really affect the sensitive Euro.
Many Central Bankers from around the world are meeting in Cairns Australia this week. Mark Carney of the Bank of England made it perfectly clear he will be back home in time for the Scottish vote. The latest information has 23% Scottish voters still undecided which is surprisingly quite a high number.
Geopolitically, things are ramping up in the Middle East again as now there are many Arab nations offering to join the US in bombing the militants in Iraq after US Secretary of State, John Kerry, wrapped up meetings in Saudi Arabia this weekend. Reports coming out today have ISIS (ISIL) wanting to ultimately gain control of the important Suez Canal, something Egypt and others would not allow. Interesting times ahead this week that can affect currency and Stock Markets, Gold, all in the instant of a News Flash.
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