Market Update – 4th July 2016 – Aussie Falls Marginally On Unclear Election Result

The Aussie dollar has lost ground this morning, falling around half a percent across the board as the election over the weekend remains undecided. Markets should have a clearer picture tomorrow when counting resumes but it will coincide with the monthly RBA Cash Rate decision at 2.30pm. Expectations are for the RBA to keep rates steady at 1.75% and you’d expect that to likely be the case given the already prevailing uncertainty.

Looking at markets and commodities it’s interesting to note that equities across Europe, the U.S and Australia have already recouped all the losses from the Brexit meltdown with the FTSE now surprisingly (or unsurprisingly) above where it was just before the Brexit vote. The reason I say unsurprisingly is that one of the core drivers of the recent equities bonanza in the U.S has been cheap money and lots of it and with the Bank of England signalling they’ll do everything to support London by printing cash and lowering rates then we may well be at just the start of another equities bonanza, this time in the U.K.

Aussie building approvals are released at 11.30am but the data is typically wild and unpredictable at best as such it doesn’t generally have much of an impact on the Aussie dollar.

DATA RELEASES TODAY:

AUD – Building Approvals at 11.30am

GBP – Consturction PMI at 6.30pm

AUD EXCHANGE RATES:

AUD/USD – 0.7466

AUD/GBP – 0.5619

AUD/EUR – 0.6708

AUD/NZD – 1.0392

AUD/JPY – 76.628

***Above rates are indiciative wholesale rates and intended as a quide only***

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Patrick Downes

Senior Corporate FX Dealer

 Compass Markets

Contact Patrick for a quote on 0431 278 632

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