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Market Update

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

AUD bides its time, waits important data later in the week

Published April 16, 2019

Author: Steve Oram

A quieter night for the Aussie as it trades at similar levels seen at yesterday’s open.  Markets patiently await key data announcements out later in the week. Should  China’s Q1 GDP forecast within government range and RBA meeting minutes continue to reiterate central bank’s wait stance, then AUD/USD could rise higher.

Last nights points of interest were President Donald Trump saying the Federal Reserve has held back the stock market and the economy, claiming that the stock market and GDP would be improved if the Fed had done its job properly. Fed Chair Jerome Powell defended the institution’s independence from political interference last week, while ECB’s Mario Draghi also voiced concerns about the central bank’s independence.

On the actual data front we had USD Empire Manufacturing out for April, this is a survey assessing business conditions and expectations of manufacturing executives in New York . A low or negative number signals poor business conditions – last nights exceeded expectations (10.1 vs 8.0). The  Empire has served as a useful earlier indicator of overall manufacturing in the US historically.

Also an interesting story in the press around China’s changing coal imports, largely under the radar which is a surprise given the sharp falls AUD saw in February on a Chinese port delaying Australian Coal Imports. Some see this as further punishment for Australia’s recent ‘aggressive’ approach to Chinese influence.

Tensions seem to have taken a new direction with News Corp reporting China’s state-owned power stations have received a government directive not to use Australian coal. Instead, China appears to be repositioning itself to accept more coal from Indonesia.

However is has also been noted this could be a more benign response to the country’s own struggling domestic coal industry and an effort to protect it and help the many who have lost jobs over the past year. How this plays out will be interesting once eyes have moved on from current data releases.