Market Update – 4th March 2020 – Stocks Go From Positive To Negative, AUD Rises Despite Rate Cut

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.

Stocks Get Whiplash:

The local stock market performed better yesterday following a bumper session in the U.S on Monday night. U.S stocks added as much as 5% marking their best one day performance since early 2018. These gains led our own market higher but only by around 0.7% as U.S futures turned negative once again late yesterday afternoon. Overnight, U.S stocks have lost another another 3%, suggesting our ASX will likely see another sell off today – around 2% is what futures are suggesting.

The AUD & The RBA: 

The Aussie Dollar seems equally unsure of its direction initially falling yesterday in the lead up to the RBA meeting at 2.30pm, however following a 25 basis point rate cut from the RBA the AUD has since rallied across the board. This could in fact suggest markets were pricing in a 50 basis point cut and therefore traders have bought the AUD following the surprise of only 25 basis points. This morning AUD/USD is marginally higher again.

Aussie GDP figures are due out today, while U.S preliminary jobs numbers are due for release around midnight.

Markets and the AUD are still finely tuned to coronavirus news flow and hence direction remains difficult to predict. I remain of the opinion that hedging using Forward Contracts is the best course of action for importers to reduce risk and lock in margins. Exporters should probably consider hedging exposures on any AUD dips – as eventually the tide will turn.


AUD/USD – 0.6566

AUD/GBP – 0.5120

AUD/EUR – 0.5870

AUD/NZD – 1.0460

AUD/JPY – 70.425


All Ords (XAO) – 6,511

Gold – A$2,480/oz

Silver –  A$25.99/oz

WTI – US$47.31 barrel


AUD – GDP q/q at 11.30am

USD – ADP Non-Farm Employment Change at 12.15am

USD – ISM Non-Manufacturing PMI at 2.00am

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 



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