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AUD regains 72 cents

Published January 14, 2019

by Nicholas Cork

The AUD had a strong session on Friday night as traders continued to adjust their positioning towards no more rate hikes in the US, and a potentially weaker USD as a result. The continuing US Government shutdown is impacting the investors view of the US economy now,  and US interest rate yields slid 3 to 4 basis points across the curve as a result.  Equities closed the session reasonably steady, and Chinese Trade data today now becomes the focus.

Brexit is still an unknown outcome as parliament votes again this week,  with the two biggest donors to the whole campaign now feeling it may be abandoned by the Government and the UK stays put. The impact on the GBP has been ok as it sits at 6 week highs to start the week, but worth keeping an eye on as the week unfolds.

AUDUSD starts today at 72 cents, 5 cents higher than the 3rd Jan. It looks like it is now going to sit in the 0.7150/0.7250 band until further direction on the US economy and Brexit, but note technically it looks overbought thus may find moves above 0.7250 tough at the moment. Importers should consider these levels compared to recent lows.

CHART : DOW JONES rising wedge formation, very overbought, 22,600 looking like a target   (REUTERS)