Market Update – 9th September 2019 – AUD Makes Gains, But They Could Be Short Lived

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.

AUD Makes Gains: 

The AUD managed to finish last week with four consecutive days of gains, markedly improving the rate at which importers were dealing at later in the week vs. earlier and showing the volatility of the Aussie Dollar as a currency.  AUD/USD which had tested 0.6690 last Tuesday and seemingly on the back foot is now back in the mid 0.68’s, while AUD/EUR has added around 100 points. AUD/JPY has rallied as is customary when we see risk appetite back on the table. How long risk appetite remains on the table is hard to tell, but there remain significant geo-political factors at play which will likely continue to sea-saw markets. My view remains the same, Forward Contract hedging is the best strategy for importers to reduce risk.

US Jobs: 

U.S non-farm payrolls missed the mark on Friday evening while average earnings rose 0.4% in the month of August. The result was a beat, but was offset by the lower jobs numbers. The unemployment rate remained unchanged at 3.7%. The market is still pricing in further Fed rate cuts in the U.S which should support AUD/USD, however that is being offset by our own weak economy and likelihood for further rates cuts from our own RBA later in the year.

Home Loans numbers are out this morning, followed by a bunch of U.K data which could have an impact on the Pound, however the main driver of AUD/GBP right now appears to be the Brexit shenanigans.

AUD EXCHANGE RATES:

AUD/USD – 0.6815

AUD/GBP – 0.5541

AUD/EUR – 0.6179

AUD/NZD – 1.0625

AUD/JPY – 72.910

OTHER MARKETS:

All Ords (XAO) – 6,752

Gold – A$2,199/oz

Silver –  A$26.47/oz

WTI – US$56.78/barrel

DATA RELEASES TODAY:

AUD – Home Loans m/m at 11.30am

GBP – GDP & Manufacturing Production m/m at 6.30pm

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick – 0431 278 632 

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