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.
Equities Drag AUD Lower:
A poor showing overnight for U.S equities and a profit warning from Apple have resulted in a session of risk off and as a result a lower AUD. The local currency is off around 0.4% against all the majors except EURO where it’s managed to hold its ground around the high 0.61’s. Apple resuscitated fears surrounding the coronavirus suggesting quarterly revenue could be impacted by supply chain issues and lower sales in China. By the end of the session, the Dow Jones finished down 0.56%, while the S&P500 finished 0.29% lower. Our local market is tipped to open flat after a bit of a sell off yesterday.
Wages Index:
Local wages data is due out this morning at 11.30am and is tipped to show wages growth of around half a percent for the quarter. More broadly, wages growth have been in a funk for the better part of a decade and have rarely grown much above half a percent on a quarterly basis. A further decline in the pace of wages growth could lock in another rate cut from the RBA at their next meeting and see AUD/USD test fresh post GFC lows – certainly not what importers are after.
Hedge With Forward Contracts:
Importers concerned about a lower AUD can lock in Forward Contracts at todays rates and by default also lock in their profit margins on future imports. Feel free to call me to discuss. At the moment this remains the best option for importers.
AUD EXCHANGE RATES:
AUD/USD – 0.6656
AUD/GBP – 0.5111
AUD/EUR – 0.6164
AUD/NZD – 1.0438
AUD/JPY – 73.166
OTHER MARKETS:
All Ords (XAO) – 7,208
Gold – A$2,395/oz
Silver – A$27.18/oz
WTI – US$52.33 barrel
DATA RELEASES TODAY:
AUD – Wage Price Index q/q at 11.30am
GBP – CPI y/y at 8.30pm
Sign up for a Compass account today and access some of the most competitive rates in the business and arguably the best service.
{{cta(‘b4d1fdf3-9b81-4df4-87c2-23257194f470’)}}
Patrick Downes
Senior Corporate FX Dealer
Phone Patrick – 0431 278 632
{{cta(’22fd720b-8ddc-4846-85e4-6ab59d459f68′)}}
DISCLOSURE AND DISCLAIMER – GENERAL ADVICE WARNING
The information provided in this report has been prepared without taking into account your particular objectives, financial situation or needs. You should consider whether our products are appropriate for you and read the FSG and PDS which are available on this website.
This report and must not be copied, either in whole or in part, or distributed to any other person.
All references to prices, amounts and currency are in Australian dollars unless otherwise noted.
This report is provided for Australian residents only and is not intended for use by residents of any other country.