The released weaker than expected on the AUD retail sales for April 2012 at -0.2 % M/M have impacted the performance of AUD/CAD by pressuring the pair to revisit the market entry rate. This is to confirm that CAD-based funds are not only invested into AUD currency and AUD-denominated interest bearing securities but also into AUD-denominated equities. The weakening retail sales performance will pressure the free-cash flow of the Australian retailing business and ultimately to pressure the dividend payout expectation and the expected earning per share (EPS). As the result, the stock return expectation to be under pressure and to drive the CAD-based funds to liquidate their investment from AUD-denominated equities for profit taking. The performance of AUD/CAD interior the time series interest rate differential based exchange rate targets and currency band however does not indicate that AUD/CAD to revisit the level of 0.9950/60. The lowest level that may be revisit is 1.0000 and at such, the Long position on AUD/CAD remains active.
AUD/CHF Pair
AUD/CHF visited the level of 0.9472 by today for (0.9472-0.9355) 117 PIPs floating profit. The pair is consistently to move to upward direction and it is expected to break the level of 0,9500. Should the pair break the level of 0.9560 and strongly defended, the Long position on the AUD/CHF could be managed at risk free trading position with protected profit and to hold to target the 0.9900 for 545 PIPs profit expectation. Subject to the performance of USD/CHF and AUD/USD, the target may be extended in the future to increase the profit expectation from both AUD appreciation and the overnight rollover fee from their interest rate differential.
The released weaker than expected on the AUD retail sales has minor impact on the performance of AUD/CHF. This is to confirm that CHF-based funds are largely invested into AUD-denominated interest bearing securities (carry trading). The pair will be consistently to move to upward direction and the long position remains active.
GBP/AUD Pair
The released weaker than expected on the AUD retail sales for April 2012 at -0.2 % M/M have impacted the performance of GBP/AUD by revisit the level of 1.5976 to indicate that GBP-based funds are not only invested into AUD currency and AUD-denominated interest bearing securities. It seems, the GBP-based funds are also invested into AUD-denominated equities. The weakening performance on the retail sales will pressure the "free-cash flow" of the Australian retailing business and absolutely to pressure the dividend payout expectation and to pressure the earning per share (EPS) to drive GB_based funds to liquidate their investment from AUD-denominated equities for profit taking and to pressure GBP/AUD by revisiting the 1.5976. However, GBP/AUD performance interior the interest rate differential based exchange rate targets and currency band is confirming that the pair will consistently to move to downward direction despite minor challenges from the equity trading activity. The performance to downward direction also confirmed by the current performance of their interest rate differential based currency correlation. At such, the short position remains active.
