Market Update – 27th Feb 2020 – AUD Feeling The Heat

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

OTHER MARKETS:

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

Sign up for a Compass account today and access some of the most competitive rates in the business and arguably the best service.

 

{{cta(‘b4d1fdf3-9b81-4df4-87c2-23257194f470’)}} 

Patrick's Signature-802090-edited.jpg

Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

  {{cta(’22fd720b-8ddc-4846-85e4-6ab59d459f68′)}}

CompassFB-1

 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.

Leave a Reply

Your email address will not be published.