Market Update – 20th March 2019 – AUD Declines With Aussie House Prices, FOMC Decision Tonight

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.

AUD Declines:

Well that might just be it for the time being for the AUD’s good little run with the local currency making a swift retreat from the 0.7100 level vs the Greenback but is also lower against all the other majors. The Home Price Index was released yesterday and showed that in the December quarter prices declined by 2.4% nationally taking the total losses for the full year to around 5.1% nationally with Sydney and Melbourne the worst performers. More recent data for the latest quarter won’t be released by the ABS for another 2 months, however CoreLogic’s more recent data is showing continued steep declines.

RBA Minutes: 

While the RBA have watched the deteriorating housing market and lending conditions, in their minutes released yesterday they suggested that a lack of dwelling investment was expected to subtract from growth and the decline “could be sharper” than currently expected however “members agreed that there was not a strong case for a near-term adjustment”. Strange when you consider that our economy is built on just a few pillars of which housing is a major part. I think a rate cut is still likely at some point this year. As such for Importers Forward Contracts in my opinion are the best way to play the current scenario especially if protecting your costing levels is the main focus.

U.S Interest Rate Decision: 

The FOMC meet to set U.S interest rates early tomorrow morning, however no change is anticipated as the U.S Fed take a wait and see approach to monetary policy. The market may still move on comments from Jerome Powell, so clients wishing to avoid risk should probably book USD payments today.

AUD EXCHANGE RATES:

AUD/USD – 0.7056

AUD/GBP – 0.5310

AUD/EUR – 0.6210

AUD/NZD – 1.0309

AUD/JPY – 78.639

OTHER MARKETS:

All Ords (XAO) – 6,276

Gold – A$1,843/oz

Silver –  A$21.69/oz

WTI – US$59.29/barrel

DATA RELEASES TODAY:

GBP – CPI at 8.30pm

USD – Federal Funds Rate & FOMC Statement at 5.00am (tomorrow morning)

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's Signature-802090-edited.jpg

Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

  {{cta(’22fd720b-8ddc-4846-85e4-6ab59d459f68′)}}

CompassFB-1

 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.

Leave a Reply

Your email address will not be published.