Market Update – 23rd July 2019 – Likely Fed Rate Cut Dragging On AUD/USD

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.

Fed Likely To Cut:

AUD/USD is the only mover over the weekend with the other AUD crosses more or less unchanged. AUD/USD fell around half a percent following weak U.S retail sales on Friday night which look likely to lock in a rate cut from the U.S Fed when they meet again on August 1st. The market is pricing in a 25 basis point rate cut which would take U.S interest rates to 2.25%, still a fair way off their low point of 0.25% following the GFC.

Equities & Commodities Still Bid:

Equities moved higher overnight while commodities prices appear to be making a bit of a comeback despite simmering trade tensions between the U.S and China. Whether we see a resolution to Trump’s trade war anytime soon remains to be seen as it’s sort of devolved into tit for tat bickering since Trump fired first shots all the way back in early 2018. To be honest it’s hard to see any progress made at all since January 2018.

No economic data is out today, and the AUD should stay pretty stable today. Importers looking to make payments should continue to do so, I think holding out for higher levels is pretty futile, especially given we’re at the highest levels since April vs. the Greenback and EURO.

AUD EXCHANGE RATES:

AUD/USD – 0.7002

AUD/GBP – 0.5605

AUD/EUR – 0.6243

AUD/NZD – 1.0375

AUD/JPY – 75.578

OTHER MARKETS:

All Ords (XAO) – 6,781

Gold – A$2,025/oz

Silver –  A$23.24/oz

WTI – US$56.07/barrel

DATA RELEASES TODAY:

None

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

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