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AUD gives up yesterday’s gain amid Wall Street sell-off

Published October 11, 2018

Author: Dennis Li

Overnight we saw the AUD back to where it finished on Monday, giving up all of Tuesday gains against the USD as US 10y bond yields hovered at a multiyear peaks of 3.23%. While optimism for a Brexit deal continued, a risk off environment with the EU worried about Italian debt and the GBP looking to make headways as it looks to take its own path, pressuring both AUDEUR and AUDGBP, down 0.85% and 0.93% respectively.

  • As rising US Treasury yields and trade policy related worries force investors to run for safe-haven assets, all three of the US stock indices poised their biggest daily fall since February this year with NASDAQ down by 3.9%, Dow Jones and S&P down by 3.1%.
  • US producer prices increased 0.2 percent in September, in line with expectations, while the wholesale inventory estimate for August showed the biggest jump in nearly five years.
  • The UK’s GDP in the summer’s quarter released on Wednesday turned to be stronger than expected as hot weather spurred consumer spending while a weak August reading hinted at slower growth ahead of Brexit next year.
  • Escalation of global trade disputes are seen as the main risk for the future, the German government has cut its forecasts for growth this year and next to 1.8 percent from 2.3 percent and 2.1 percent respectively.