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 Moves Higher:
The AUD is up since my Monday report having gained around half a percent through Monday while moderating some of those gains yesterday. AUD/USD is this morning, near the highest level since mid September after reaching a low in the 0.66’s. Is this the start of a new cycle, perhaps a period of relative AUD strength? Probably not, but it all boils down to our local economy, growth, inflation and the RBA. Should we see further cuts from the RBA (to stimulate our economy) then the AUD will remain on the back-foot, whilst on the other hand if we see an improving economy and the RBA cease rate cuts, then perhaps the AUD will begin to rally. The key message though, is risk management and hedging remain an imperative tool for importers in this stage of the cycle.
A quick Brexit update and what we see is further delays following two keys votes overnight, one saw the EU support the latest Brexit plans, while in the UK another vote saw members of parliament reject a fast-track Brexit law. This means more to-ing and fro-ing and a new date for Brexit of January 31st 2020. The original Brexit vote was held in mid 2016, or roughly 3 and a half years ago. Not surprisingly the GBP fell sending the AUD/GBP cross higher this morning.
No economic data is released today, however RBA Assistant Governor Kent speaks this morning around 9.30am. Our local market is set to open lower this morning following a weak lead from overseas equities market and another failed Brexit vote.
AUD EXCHANGE RATES:
AUD/USD – 0.6831
AUD/GBP – 0.5290
AUD/EUR – 0.6138
AUD/NZD – 1.0671
AUD/JPY – 74.012
All Ords (XAO) – 6,778
Gold – A$2,170/oz
Silver – A$25.56/oz
WTI – US$54.31 barrel
DATA RELEASES TODAY:
AUD – RBA Assist Gov Kent Speaks at 9.20am
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