A weaker US dollar, stronger commodities markets and a positive finish for European and U.S equities has helped the Aussie move higher against most of the majors and back above 0.7400 vs. the Greenback. The U.S Dollar Index came off around 20-30 points, while commodities and equities moved higher – commodities were well supported by higher prices for base metals Zinc, Copper and Nickel.
The RBA kept rates on hold yesterday at 1.5% while noting that GDP is expected to average a bit above 3% during 2018 and 2019. The concerns though remain the housing market and over indebtedness as a whole – “one continuing source of uncertainty is the outlook for household consumption. Household income has been growing slowly and debt levels are high.” On the plus side the RBA noted that business conditions were generally positive in both non-mining industries and the resource sector which has continued to rebound. Overall inflation is likely to come in at a little under 2% but the RBA expected this number to grow through 2019 and 2020 – I would suggest the next rate hike will likely take place sometime in 2019 which at the time should be bullish for the Aussie dollar. In the interim expect more of the same and for AUD/USD to start with a 7 in the front of it.
AUD EXCHANGE RATES:
AUD/USD – 0.7402
AUD/GBP – 0.5711
AUD/EUR – 0.6374
AUD/NZD – 1.1013
AUD/JPY – 82.43
USD/BTC – $6,718
OTHER MARKETS:
All Ords (XAO) – 6,340
Gold – A$1,631/oz
Silver – A$20.71/oz
WTI – US$68.57/barrel
DATA RELEASES TODAY:
AUD – Home Loans m/m at 11.30am
AUD – RBA Governor Lowe Speaks at 1.05pm
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Patrick Downes
Senior Corporate FX Dealer
Phone Patrick – 0431 278 632
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