Market Update – 19th June 2018 – Aussie Dollars Decline Accelerates As Markets Remain Jittery

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

OTHER MARKETS: 

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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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

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