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 On The Backfoot:
The Aussie Dollar continues to perform poorly in the midst of this current market wide sell-off and each day it would seem we hit a new post-GFC low. What halts the precarious and perilous drop in the AUD remains to be seen, so my best advice if you’re an importer is to do one of two things. 1/ ask your suppliers overseas to consider lowering their prices or 2/ start hedging some of your exposures with a Forward Contract. I feel like I’ve been suggesting this ad-nauseum over the past year with very little take up, however a few clients have recently started to hedge the AUD rate with Forward Contracts which is the prudent thing to do. U.S equities lost another half a percent overnight, bringing their losses this week to over 8%, the worst weekly decline since the GFC some 11-12 years ago.
The local ASX and by default the AUD should perform a little better today given losses weren’t extreme on equity markets overnight, Trump is due to hold a press conference re: the U.S’s response to corona virus etc, this may provide a bounce and opportunity to hedge further USD exposures.
Private Capital Expenditure Out:
Local data released today includes private capital expenditure at 11.30am. The market is pricing in half a percent of growth here, however the data has been poor for the better part of 5 years, so can’t really see these numbers impacting the AUD at all. All eyes remain on the coronavirus and the global effort to combat it’s spread.
On a final note: go out and support your local Chinese restaurant, they are doing it tough at the moment. I can recommend some very good dumplings, hot pot or whatever takes your fancy.
AUD EXCHANGE RATES:
AUD/USD – 0.6522
AUD/GBP – 0.5046
AUD/EUR – 0.5991
AUD/NZD – 1.0370
AUD/JPY – 72.003
All Ords (XAO) – 6,790
Gold – A$2,504/oz
Silver – A$27.35/oz
WTI – US$48.66 barrel
DATA RELEASES TODAY:
AUD – Private Capital Expenditure q/q at 11.30am
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Senior Corporate FX Dealer
Phone Patrick – 0431 278 632
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