by Nicholas Cork
The AUD starts the week hovering near 72 cents after coming under selling pressure again late Friday as the RBA Statement confirmed they are not looking to bring forward the timing for rate hikes. The slide continued in NY trading as equities and oil were sold, and the USD raced towards 18 month highs after US producer price index results exceeded nearly all expectations.
Consequently the Aussie cross rates offer a mixed bag to start the week with AUDJPY and AUDCHF lower on traditional ‘risk-off’ positioning, AUDEUR and AUDGBP still remain elevated, potentially on the Italian budget and Brexit risks, and AUDNZD is at 5 month lows as the NZD shrugs off the weak Dairy auction data and focusses instead on the exceptionally strong employment data.
Worth noting for our clients with trans-tasman exposures the volatility in AUDNZD over the last 5 months as it has moved from 1.0700 in June to 1.1150 in August, and today sits back near 1.0700 again after falling 150 points last week. Also worth noting the view of the punters as Speculative FX Data released on the weekend showed a massive 25% reduction in total volume of short positions of NZDUSD in the previous week, compared to just a 4% reduction in AUD shorts. (n.b. AUD total speculative volume is over twice that of NZD)
The highlight for domestic data this week will be AU unemployment on Wednesday. Market moving headlines will continue over Italy, Brexit and Tariffs, and Oil should really be a bigger focus after falling 20% in the last month as the Saudis now talk cuts in production. Finally, it seems we will still need to wait for next week’s G20 to hopefully get some direction on US-CHINA trade.
© 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.
Adam Nikitins and Stewart McCallum were appointed Joint and Several Voluntary Administrators of EncoreFX (Australia) Pty Ltd on 30 March 2020.
Rees Logan, Adam Nikitins and Stewart McCallum were appointed Joint and Several Voluntary Administrators of EncoreFX (NZ) Limited on 30 March 2020.
Any queries regarding the Administrations should be directed to email@example.com.