Last Monday, Yellen expressed her disappointment on the weak labour market report which indirectly took the June rate hike off the table. 

The U.S. economy only added 38,000 jobs, the lowest monthly job gain since 2010. Overall, Yellen remained optimistic about the economy as she told the markets not to overreact on the drastically weak May non-farm payrolls (NFP) report. Yellen also noted that global risks required continued attention and that Brexit vote to leave may have significant repercussions. Adding on, she said that the future path of monetary policy would depend on how these uncertainties resolve.

Meanwhile, The Reserve Bank of Australia (RBA) left its benchmark cash rate unchanged a month after a 25 basis point cut, which took rates to their current record low of 1.75 percent. In a statement following the interest rate decision, the central bank said inflation was expected to remain low for some time due to subdued growth in labour costs.

The Reserve Bank of New Zealand (RBNZ) kept its Official Cash Rate unchanged at 2.25% on Thursday seeing the kiwi at a one year high against the greenback. Following the decision, RBNZ Governor Graeme Wheeler said in his policy statement “The exchange rate remains higher than appropriate given New Zealand’s low commodity export prices. A lower New Zealand dollar is desirable to boost tradables inflation and assist the tradables sector.”

 

Our Picks

NZDUSD – Uptrend losing momentum. A break of trend line and support will see further retracement.

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USDCAD – Bearish. Potential short selling near resistance around 1.2800.

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EURCAD – Bearish with potential retracement. Potential short selling at resistance, R1 = 1.4415, R2 = 1.4500

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Top News This Week

US: Retail Sales m/m.  Tuesday 14th June, 8.30pm.

We expect figures to come in at 0.7% (previous figure was 1.3%).

US: Federal Funds Rate.  Thursday 16th June, 2am.

We expect figures to remain unchanged at 0.5% (previous figure was 0.5%).

UK: Official Bank Rate.  Thursday 16th June, 8.30pm.

We expect figures to remain unchanged at 0.5% (previous figure was 0.5%).

 

 

Fullerton Markets Research Team

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