Market Update – 2nd August 2019 – AUD & Stocks Whacked As Trump Signals More China Tariffs

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 Whacked: 

The Aussie Dollar has touched fresh 10 year lows vs. the Greenback following another round of U.S tariffs on Chinese exports and concerns these new tariffs may further weaker a global economy already struggling with stagnant growth. AUD/USD breached the 0.6800 level marking the first time since 2009 (if you exclude the flash crash of 3rd January this year) that we’ve had a 67 handle on AUD/USD. AUD/JPY also got slapped around, falling a whopping 200 points since U.S Fed Chairman Jerome Powell cut U.S interest rates yesterday morning. In a rather ominous sign for the global economy, Gold also continued its almighty rip higher and is this morning trading at A$2,125 per ounce, which is fresh all time highs.

US and European Stocks: 

U.S stocks dipped as much as 1.2% as the U.S business community and investors weighed the consequences of the newest tariffs on Chinese exports, while in Europe markets fared better up between half and three quarters of one percent. The UK FTSE was the only detractor down 0.03%.

Retail Sales & Non-Farms Due:

Ahead today is Aussie retail sales numbers at 11.30am – expectations are for retail sales growth in the range of 0.2-0.3% but anything is possible. Retail sales have been weak for the better part of 5 or 6 years and it’s hard to see much, if any turnaround while the local economy is limping along and house prices are weak.

U.S non-farm payrolls and the unemployment rate are due this evening. Expectations are for a further drop in the unemployment rate to 3.6% with 164,000 new jobs created.

AUD EXCHANGE RATES:

AUD/USD – 0.6765

AUD/GBP – 0.5576

AUD/EUR – 0.6099

AUD/NZD – 1.0339

AUD/JPY – 72.633

OTHER MARKETS:

All Ords (XAO) – 6,871

Gold – A$2,123/oz

Silver –  A$24.00/oz

WTI – US$54.50/barrel

DATA RELEASES TODAY:

AUD – Retail Sales m/m at 11.30am

USD – Non-Farm Employment Change & Unemployment Rate at 10.30pm

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

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