Market Update – 20th June 2019 – U.S Fed Signals A Rate Cut Could Be On The Way, Stocks & AUD Rebound

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.

U.S Fed May Cut:

The AUD and stocks have rebounded following the U.S Fed Bank meeting this morning in which Jerome Powell signalled looser monetary policy (rate cuts) could be on the way. Looser policy generally is seen as supportive for the economy and stocks but a drag on the local currency (USD), hence why equities moved higher and the USD lower.

AUD Holds:

AUD/USD which had looked to be threatening a move below 0.6800 on the wholesale market may now hold on to key support levels around where we are trading right now. The other positive for importers is that if the U.S Fed joins the RBA in cutting interest rates, then it will to some extent offset any rate cuts from the RBA, which may mean the lows are in for AUD/USD. Nothing is certain though in foreign exchange and trying to pick AUD levels is typically a waste of time, so I’ll continue to watch and wait for any confirmation of this.

U.K retail sales are out tonight along with the Bank of England’s interest rate decision, expectations are for no change to interest rates.

AUD EXCHANGE RATES:

AUD/USD – 0.6859

AUD/GBP – 0.5413

AUD/EUR – 0.6100

AUD/NZD – 1.0475

AUD/JPY – 74.144

OTHER MARKETS:

All Ords (XAO) – 6,728

Gold – A$1,972/oz

Silver –  A$21.99/oz

WTI – US$54.61/barrel

DATA RELEASES TODAY:

GBP – Retail Sales m/m

GBP – Official Bank Rate at 9.00pm

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

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