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.
Oil & Gold Surge:
AUD/USD made small gains overnight while the other crosses remain mostly unchanged. Gold and Oil prices though were the big movers with the price of Gold moving past A$2,000 an ounce for the first time ever while Oil surged closed to US$3 a barrel after Iran shot down a U.S Navy drone in the Persian Gulf. Tensions appear to be building and the market doesn’t like it.
Gold Rallying Not A Good Thing:
Additionally markets appear to be starting to price in some serious volatility & tough times ahead and a surging Gold price is a marked example of that. When Gold rallies, it’s usually not something to cheer about. Additionally in the U.S the Fed appears to be moving closer to a rate cut in a bid to boost the economy and growth. When the Fed cuts rates usually it means some sort of contraction/recession is around the corner, again another red flag for markets.
I’ll continue to monitor things and update accordingly, but prudent risk management at this point in the cycle is warranted. With the AUD, that means using forward contracts to hedge upcoming exposures.
AUD EXCHANGE RATES:
AUD/USD – 0.6890
AUD/GBP – 0.5414
AUD/EUR – 0.6100
AUD/NZD – 1.0479
AUD/JPY – 73.947
All Ords (XAO) – 6,767
Gold – A$2,007/oz
Silver – A$22.32/oz
WTI – US$57.30/barrel
DATA RELEASES TODAY:
EUR – French Flash Services PMI at 5.15pm
EUR – German Flash Manufacturing PMI at 5.30pm
Sign up for a Compass account today and access some of the most competitive rates in the business and arguably the best service.
Senior Corporate FX Dealer
Phone Patrick – 0431 278 632
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.