img AUS
img NZ
img CDN
Call us now: 1800 874 942
imgOnline Dealing Login

Market Update

EncoreFX’s daily market updates are written by our experienced and professional dealing team.

AUD weakens as crude oil and US stocks rebound

Published November 27, 2018

Author: Dennis Li

An improved risk appetite post the Thanksgiving weekend has helped offshore equities with the Dow up almost 1.50% on good volumes. Somewhat of a concern for the AUD is the fact that the increased appetite for risk has not been reflected in the AUD’s value. It has lost approx. 30 points from yesterday’s close due to a sharp rebound in the USD. A rally in the Crude oil price still couldn’t help the AUD and as we approach the December/ January period which is, apart from the odd exception, a strong period for the Aussie dollar, the markets will be looking for a good reason to take the AUD higher. The catalyst may be the G20 summit where all eyes will be on China and the US and any trade associated comments.

Prior to that, with another quiet week of market-moving economic data ahead, RBA Governor Philip Lowe’s speech this morning and that from Fed’s Powell on both Thursday and Friday before the G20 summit will capture all of the market’s attentions.

  • German business morale fell by more than expected in November as the country’s exporters got caught up in a trade dispute between China and the United States and uncertainty related to Britain’s divorce from the EU.
  • The ECB President Mario Draghi acknowledged slowing growth in the bloc however it is not enough to derail plans by the bank to dial back stimulus further.
  • According to two government sources on Monday, Italy’s government may reduce next year’s budget deficit target to as low as 2% of GDP to avoid disciplinary action from Brussel.
  • The EU published their proposal on Monday for reform of the dispute settlement process at the World Trade Organisation (WTO) that was agreed with China, India and other countries, hoping to overcome objections from the US that has thrown the WTO into crisis.