U.S and European stocks, the AUD and commodities all moved higher Friday evening helping markets to finish on a positive note in an otherwise less than positive week for markets.
A closer look at AUD/USD and we are hovering around the 0.7400 handle after finding a bit of support in the 0.7300’s. The medium term trend for AUD/USD however remains pretty bearish with the currency pair off some 6 cents or 600 points since the beginning of February. Longer term (which I’m calling back to early 2016) we were in a cyclical uptrend however that appears to have ceased when we failed to hold 0.7600 in late April and then again in the middle of June. Where to for the Aussie from here is anyone’s guess but views range from 0.8000+ on the high side and 0.6500 on the low side. I prefer to think we will continue to hold a range between 0.7300 and 0.8000, with the AUD supported at 0.7300 by strong commodities prices and constrained at 0.8000 by rising U.S interest rates.
Trump meets with Putin later this evening in Helsinki while his Trade War with China persists. I’m a generally optimistic fellow and hence think that we may have seen the first and only shot in the Trump/China trade war with common sense hopefully prevailing later this month. Should that happen we should see a nice bounce in commodities which should flow on to a higher AUD.
AUD EXCHANGE RATES:
AUD/USD – 0.7398
AUD/GBP – 0.5587
AUD/EUR – 0.6329
AUD/NZD – 1.0947
AUD/JPY – 83.17
USD/BTC – $6,333
OTHER MARKETS:
All Ords (XAO) – 6,351
Gold – A$1,673/oz
Silver – A$21.33/oz
WTI – US$69.77/barrel
DATA RELEASES TODAY:
CNY – GDP q/y at 12.00pm
USD – Retail Sales m/m at 10.30pm
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Patrick Downes
Senior Corporate FX Dealer
Phone Patrick – 0431 278 632
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