The Aussie dollars decline has continued unabated overnight as markets remain jittery following initial jabs in a trade war between China and the U.S and general weakness in commodities prices. AUD/USD looks set to test support at the 0.7400 level, while AUD/EUR which had been as high as 0.6546 is now looking quite weak in the mid to high 0.63’s. AUD/GBP is holding just above 0.5600 but may well also succumb to further selling pressure if this mornings monetary policy meeting minutes from the RBA are more bearish that anticipated. Minutes from the last meeting will be released around 11.30am.
U.S and European equities sold off again overnight with European stocks faring the worst, down as much as 1.4% in Germany. Commodities as mentioned above also performed poorly Zinc, Nickel and Copper all lower overnight, oil moved higher marginally.
Data out today includes monetary policy minutes at 11.30am, followed by a speech from ECB President Draghi and U.S Building Permits later tonight. The key data probably being the monetary policy minutes release. The RBA has been generally pretty bearish on their views of the Australian economy and are really struggling to see a reason to raise rates from a stubbornly low 1.5%. The RBA is concerned that higher rates could lead to a swifter decline in property prices so they are preferring to wait until wages growth picks up as that could offset the impact of any further decline in property prices and of course allow indebted property investors the ability to pay off the larger associated mortgage repayments.
AUD EXCHANGE RATES:
AUD/USD – 0.7421
AUD/GBP – 0.5601
AUD/EUR – 0.6375
AUD/NZD – 1.0702
AUD/JPY – 82.051
USD/BTC – $6,697
All Ords (XAO) – 6,212
Gold – A$1723/oz
Silver – A$22.22/oz
WTI – US$65.67/barrel
DATA RELEASES TODAY:
AUD – Monetary Policy Meeting Minutes from the RBA at 11.30am
EUR – ECB President Draghi Speaks at 6.00pm
USD – Building Permits at 10.30pm
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