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.
Well the AUD has had a week to forget, losing close to 3 cents vs. the Greenback in one of the most savage sell offs we’ve seen since the global financial crisis around 12 years ago. We all knew a correction would happen again, but never knew what the catalyst might be. Obviously we now know that catalyst was a particularly viral flu like illness, which has caused market closures, supply chain disruptions and general market hysteria. The AUD is down right across the board and the truth to the matter is no one knows where the selling ends and the buying will start again, AUD/USD may well test the 0.50’s or it could turn around swiftly with a successful coronavirus vaccine and accompanying central bank stimulus. The best bet though, is to keep hedging your FX exposures via a Forward Contract.
Chinese data released Saturday not surprisingly showed dramatic drops in economic activity due to containment measures. However things appear to be firing up again in the worlds second largest economy following what appears to be successful containment of the virus’ spread within mainland China. Locally we have building approvals data due tomorrow morning, followed by the cash rate decision at 2.30pm tomorrow afternoon. Expectations are that we’ll see no cut to interest rates, but the RBA statement might telegraph a cut at their next meeting in April.
AUD EXCHANGE RATES:
AUD/USD – 0.6436
AUD/GBP – 0.5032
AUD/EUR – 0.5821
AUD/NZD – 1.0388
AUD/JPY – 69.100
All Ords (XAO) – 6,511
Gold – A$2,452/oz
Silver – A$25.79/oz
WTI – US$45.31 barrel
DATA RELEASES TODAY:
CNY – Caixin Manufacturing PMI at 12.45pm
USD – ISM Manufacturing PMI at 2.00am
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Senior Corporate FX Dealer
Phone Patrick – 0431 278 632
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