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Market Update

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

AUD rallies strongly on US Fed’s dovish comment

Published November 29, 2018

Author: Dennis Li

We foreshadowed earlier in the week of the potential for volatility that could arise from either of the US Fed chair Powell’s speech and/or the G20 on the weekend. Powell didn’t disappoint giving a more dovish speech around midnight our time, signalling the US central bank is nearing an end to its interest-rate hikes. US stocks jumped by 2.50% and the AUD was broadly up against other major currencies with AUDUSD rallying by 1.15%, breaking through 0.7300 on the weaker USD overnight.

  • The US economy slowed in Q3 as previously reported with the revised annualised GDP remaining at 3.5% which is still strong enough to keep growth on track to hit the Trump administration’s 3% target this year.
  • The Bank of England warned on Wednesday that Britain risks a bigger hit to its economy than during the GFC a decade ago if it leaves the EU in a ‘disorderly’ manner in March 2019.
  • Italian Prime Minister Giuseppe Conte said on Wednesday that there should be room to adjust the final budget numbers after a cost review of the measures in the spending package is completed.
  • China’s President Xi Jinping said on Wednesday ahead of the G20 summit that China will widen market access for foreign investors and step up protection of intellectual property rights but made no reference to US President Trump’s latest comment on raising tariffs in 2019.