Market Update – 2nd May 2018 – AUD/USD Continues May Slide, Hits 5 Month Low

The Aussie dollar has continued its slide through May with the second day of the month marking a new 5 month low for AUD/USD at 0.7472 earlier this morning. AUD/GBP however bucked the trend moving north of 0.5500 on poorer than expected U.K manufacturing data and slower growth in lending.

Contributing to the new low in AUD/USD was commodities prices which got whacked again overnight with copper, nickel, zinc and iron ore all losing ground while U.S and European stocks finished the session mixed. Sentiment in markets remains choppy and risks are certainly there that we see more volatile moves in both currencies and equities. Please as importers and exporters keep this in mind when managing your future foreign currency exposures as the Aussie dollar is prone to big swings in either direction.

Hedging is a prudent and worthwhile strategy to:

1. Reduce risk and
2. Lock in profit margins

U.S preliminary ADP jobs numbers are out tonight and precede the official non-farm employment figure which is released Friday night. In addition to this we have the U.S FOMC Meeting and Fed Funds Rate decision in the early hours of tomorrow morning. No movement in the Federal Funds Rate from 1.75% is expected tomorrow morning, but a shock increase of 25 basis points could see AUD/USD lose as much as 100 points plus.

AUD EXCHANGE RATES:

AUD/USD – 0.7491

AUD/GBP – 0.5501

AUD/EUR – 0.6245

AUD/NZD – 1.0690

AUD/JPY – 82.292

USD/BTC – $9,031

OTHER MARKETS: 

All Ords (XAO) – 6,100

Gold – A$1742/oz

Silver –  A$21.61/oz

WTI – US$67.37/barrel

DATA RELEASES TODAY:

GBP – Construction PMI at 6.30pm

USD – US ADP Non-Farm Payrolls at 10.15pm

USD – FOMC Statement/Federal Funds Rate at 4.00am