Please note that the commentary below is factual information provided to a group of readers as a web blog, and where an opinion is expressed by the author, it is GENERAL ADVICE only.
AUD Momentum Continues:
The AUD has continued to gain ground vs. the majors as coronavirus fears ease and central banks flag a wait and see approach to the global economy. The worse fears had been that the coronavirus would spiral out of control, shut down supply chains for years and cause a mass financial hysteria like that of Black Tuesday in 1929. However, the REALITY is that Chinese containment measures are working (as most with any commonsense would have expected), and while supply chains and international trade may be adversely impacted over the next month, its probably a fair bet things will be more or less back to normal come March.
AUD/USD & RBA Gov Lowe:
AUD/USD which had hit a low around 0.6650 on the wholesale market is now back above 0.6700 and conceivably on it’s way back towards 0.6800. However a speech from RBA Governor Lowe this morning at the Australia-Canada Economic Leadership Forum, in Melbourne should give us a bit of clarity on what the RBA’s next move might be with respect to interest rates. At their last meeting a week ago the RBA held rates at 0.75% and noted that “the outlook for the global economy remains reasonable” and that “there have been signs that the slowdown in global growth that started in 2018 is coming to an end.” Inflation though is still low, perhaps to low for the RBA, so that may be a catalyst for a further rate cut, however it’ll take a bit more data before the RBA commits to anything.
AUD EXCHANGE RATES:
AUD/USD – 0.6707
AUD/GBP – 0.5167
AUD/EUR – 0.6164
AUD/NZD – 1.0384
AUD/JPY – 73.855
All Ords (XAO) – 7,185
Gold – A$2,324/oz
Silver – A$25.95/oz
WTI – US$51.84 barrel
DATA RELEASES TODAY:
AUD – RBA Gov Lowe Speaks at 11.00am
USD – Core CPI m/m at 12.30am
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Senior Corporate FX Dealer
Phone Patrick – 0431 278 632
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