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AUD Hammered Twice

Published February 22, 2019

By Nicholas Cork

The AUD finally made its dash to 72 cents after employment data release showed double the maximum expected growth in new jobs. It only had half an hour to bask in the sun before a report from Westpac was released where they now expect the Reserve Bank to cut the cash rate by 25bps in both August and November this year.

This saw a quick drop back to 0.7150 where it trod water until a significant announcement that China is banning Aussie coal from Dalian Port hit the afternoon session, seeing AUD swiftly falling back below 71 cents.  Although Dalian only accounts for 1.8% of Australian coal exports the message is significant as China flexes its muscles within the region, and perhaps just a precursor to the road ahead.  A Dalian official said he was not given a reason for the ban on Australian imports……

After bottoming out towards 0.7075, some comfort was taken from perceived progress in the US-China Trade talks and a small blip to 0.7110 was seen briefly in late NY before easing into this mornings open.  AUD cross rates are all much lower to start today, and technically they nearly all look shocking as they have had an ‘outside range day’ and have all closed lower than the previous days’ lows. In brief Brexit news, as many as 25 Govt members are ready to vote for Brexit delay unless UK PM May rules out “No Deal”.

Could be an interesting session. We await China’s official response. The miners are saying nothing yet…

AUD back into the 0.7050/0.7150 range again