Market Update – 25th January 2018 – AUD/USD Continues To Surge As The Greenback Goes Into A Tailspin

Apologies about the absence of a morning report over the past two days – it’s been a couple of busy mornings booking FX deals with the AUD continuing to surge higher vs. the Greenback.

However it looks like it’ll likely be another business day for Compass Markets and our competitors (the big four banks) with AUD/USD now at 0.8075 (up again overnight by a factor of 1%). It may be worthwhile for importers to start looking at USD payments or hedging of your upcoming USD exposures as these AUD/USD runs in both directions are typically tough to call. Give me a bell if you’d like to discuss what hedging is or how it can benefit your business – 0431 278 632.

Why has AUD/USD gone on this almighty run higher? Well it’s probably a number of factors, but most of which relate to Trump and his U.S Government shutdown over the weekend and more recently overnight placing significant tariffs on goods imported into the U.S starting with washing machines and solar panels from South Korea and China. Obviosuly less international trade/trade wars probably mean a lower Greenback and if there’s anything we know for sure Trump wants to level the playing field, what better way to do that than to lower/weaken the Greenback, China have been doing this for years keeping their CNY artificially lower.

Overnight we have the latest interest rate decision from the ECB, however all forecasts suggest no change to interest rates from their rock bottom level of 0.00%.

AUD EXCHANGE RATES:

AUD/USD – 0.8075

AUD/GBP – 0.5679

AUD/EUR – 0.6510

AUD/NZD – 1.0868

AUD/JPY – 88.443

USD/BTC – $11,181

COMMODITIES: 

Gold – A$1682/oz

Silver –  A$21.77/oz

WTI – US$65.81/barrel

DATA RELEASES TODAY:

EUR – Minimum Bid Rate (interest rate decision) at 11.45pm