by Nicholas Cork
AUD appears to be falling into a coma as it awaits real news. The small spike at the open yesterday towards 0.7120 was short lived as it fell back below 0.7100 just as quickly, and then spent the rest of the session within a 20 point range, but still holding above the 0.7070 support level. Today’s RBA announcement will be widely anticipated as clues in the text are searched for any subtle nuances by the RBA Board, especially as the market is pricing in over 75% chance of a cut by the end of 2019. Prior to this Australia has the Trade Balance release at 11.30 am.
As an apparent US-CHINA Trade resolution approaches, the AUD is seriously lagging if this is a risk-on environment, or even risk neutral. The chart below shows the AUD vs a composite of Asian equity indexes ex-Japan. This index is rallying hard as investors pile back into Asian markets yet the AUD is stuck in a low range – would expect the two to converge again at some stage.
AUDUSD vs Asian stocks ex-Japan (Reuters)
© Copyright - EncoreFX, 2018.EncoreFX (Australia) Pty Ltd ABN 42 607 244 879 AFSL 479 870 is the issuer of the financial products in Australia. The information on this website has been prepared without taking into account your objectives, financial situation or needs and so before acquiring any financial services or products from EncoreFX, you should consider the appropriateness of the information having regard to your own objectives, financial situation or needs. You should obtain the product disclosure statement (PDS) for the relevant product and consider the PDS before making any decision to acquire the product. The information on this website is not directed at residents of any country other than Australia and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. It is the responsibility of visitors to this website to ascertain the terms of, and comply with, any local law or regulation to which they are subject.