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.
The GBP has rallied overnight thanks to a defeat of Boris Johnson’s call for another election on the 15th of October which if he had won would have seen the U.K leave the EU in spectacular fashion on the 31st. Instead another bill, to delay Brexit until January 2020, passed. The Pound immediately rallied as you would expect given the turmoil and uncertainty a hard Brexit would have on the U.K economy. This is a constantly evolving story as such AUD/GBP is expected to remain volatile through the coming months given it is still not out of the realm of a possibility that another Brexit referendum occurs this year. A failed second referendum to leave the EU would probably see a swift surge in GBP and perhaps even see growth metrics pick up in the U.K rather quickly.
Australian GDP figures were released yesterday and what the data showed was growth in GDP of just 1.4% for the financial year just ended. The June quarter showed GDP growth of 0.5%, which is an improvement but still below where the RBA would like GDP to be. Overall, it’s looking more and more likely that we see another rate cut in the October quarter of 25 basis points. The Aussie Dollar as such will remain under pressure with a bias to the downside. Those importers holding off making payments at the moment should be aware there is a fair chunk of technical resistance at 0.6800 vs. the USD.
Local trade balance figures and preliminary jobs numbers out of the U.S are due tonight.
AUD EXCHANGE RATES:
AUD/USD – 0.6765
AUD/GBP – 0.5513
AUD/EUR – 0.6127
AUD/NZD – 1.0658
AUD/JPY – 72.012
All Ords (XAO) – 6,656
Gold – A$2,283/oz
Silver – A$28.81/oz
WTI – US$55.87/barrel
DATA RELEASES TODAY:
AUD – Trade Balance at 11.30am
USD – ADP Non-Farm Employment Change at 10.15pm
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