Market Update – 4th September 2019 – RBA Holds Rates Steady, AUD Rises

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.

RBA Hold: 

The RBA chose to keep rates on hold yesterday at 1.00% while reiterating that they would continue to “ease monetary policy further if needed to support sustainable growth in the economy“. RBA Chief Lowe also cited slower growth in the first half of 2019 than had been anticipated, weighed down by declining house values and stubbornly low to non-existent income growth. The AUD initially dropped 10-15 points following the RBA Statement yesterday afternoon, but has since recovered and is this morning trading around half a percent higher across the board. Hard to understand why the bounce, when conceivably the AUD looks likely to test lower lows over the next 6-12 months, but as Importers it provides an opportunity to trade at a higher level than Monday and Tuesday.

GDP Numbers Due:

Aussie GDP numbers are due out this morning and continue a busy weekend for economic data. Quarterly GDP is tipped to come in around 0.5% or annualised at 2% – which is around what Phillip Lowe anticipates for the duration of 2019 and likely 2020. Obviously the one sector that’s being supported by a low AUD is exports and that was evident in the the bumper current account surplus delivered yesterday – in fact it was the first current account surplus in 44 years.

AUD EXCHANGE RATES:

AUD/USD – 0.6726

AUD/GBP – 0.5558

AUD/EUR – 0.6128

AUD/NZD – 1.0647

AUD/JPY – 71.278

OTHER MARKETS:

All Ords (XAO) – 6,673

Gold – A$2,289/oz

Silver –  A$28.56/oz

WTI – US$53.85/barrel

DATA RELEASES TODAY:

AUD – GDP q/q at 11.30am

GBP – Inflation Report Hearings at 11.15pm

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

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