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AUD Trying to consolidate

Published February 25, 2019

By Nicholas Cork

The AUD starts today at the top of the re-emerged 0.7050/0.7150 range after a somewhat volatile end to last weeks’ trading.  For the AUDUSD, the damage was done on Thursday when the coal ban story broke yet still, no real confirmation whether a change in policy has taken place or not. The AUD fell 150 pips on the coal ‘news’ and has since recovered half of that, and combined with the so-called ‘flash-crash’ last month, this is the absurdity of FX markets in 2019.

Technically no major damage was done as the AUD still remains above 70 cents, and we now wait for some direction from the continuing US – China trade talks.  Speaking of which, comfort is taken from Chinese VP Liu extending his Washington trip, however, the concern is felt that Trump and his top trade negotiator Lighthizer appear to be fraying as they imploded in front of China’s top negotiator around ‘memorandums of understanding’ – not a good look.

The other main game, Brexit, trundles towards its deadline with PM May announcing that she would be delaying the parliamentary vote on her Brexit deal.  The vote was originally scheduled for this week, but will now happen at some stage before March 12th, allowing May more time for negotiations with the EU…

No local data of note this week except CoreLogic House price data on Friday (place your bets).

China releases PMI data on Thursday and Friday which will be the focus.

AUD Chart (Reuters)