Market Update – 20th November 2018 – FAANGs Get Whacked & Drag Down AUD

Financial markets had a brief respite from the selling last last week which helped the AUD make solid strides hitting a high of around 0.7330 vs. the Greenback in the early hours of Saturday morning, while Brexit issues have seen AUD/GBP surge to 6 month highs just shy of 0.5700. While AUD/GBP has held onto those gains, unfortunately though, AUD/USD has now come back to around the mid 0.72’s following some further savage selling across both U.S and European equities overnight. The NASDAQ was again the biggest detractor falling by a whopping 3.03% which took the so called FAANG (Facebook, Amazon, Apple, Netflix and Google) stocks to their lowest levels in about a year. Local equities are expected to open around 0.2% lower this morning as a result.

Ahead today we have Monetary Policy Meeting Minutes from the latest RBA meeting at 11.30am, followed by Inflation Report Hearings out of the U.K at around 9.00pm this evening. Both sets of data could provide some volatility for the AUD and AUD/GBP respectively, so those importers with AUD exposures would be best to hedge ahead of the data or risk adverse movements in the AUD.

Back to the AUD and some forecasts popping up over the past few days suggest we may have bottomed out with respect to AUD/USD but gains so far from the lows have been quite modest. I have seen some predictions on sites like Bloomberg et al that 0.7600 could be in the realm of possibility in the next 6-12 months. Obviously while bullish forecasts are great for importers please consider these are just predictions and the best strategy is to continue to hedge around your costing levels and ensure your importing remains profitable.

AUD EXCHANGE RATES:

AUD/USD – 0.7261

AUD/GBP – 0.5632

AUD/EUR – 0.6337

AUD/NZD – 1.0634

AUD/JPY – 81.758

USD/BTC – $4,870

OTHER MARKETS:

All Ords (XAO) – 5,786

Gold – A$1,678/oz

Silver –  A$19.78/oz

WTI – US$57.27/barrel

DATA RELEASES TODAY:

AUD – Monetary Policy Minutes at 11.30am

GBP – Inflation Hearings at 9.00pm

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

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