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Aussie back below 0.7100

Published October 23, 2018

Author: Nick Cork

The AUDUSD opens today under pressure below 71 cents after offshore markets were not encouraged by China’s stimulus plan and subsequent 4% rally in Chinese equities. Both the DOW and FTSE closed lower after sentiment over Brexit remained affected by the negotiations over the Northern Irish ‘backstop’, slightly offset by more conciliatory tones from both sides over the Italian budget.

Locally, a report that many growth orientated funds are closing positions out on their holdings of the big four Australian banks, (31 closed, 146 reduced), as their combined yield has dropped from 20% to 12% over the last decade will also continue to weigh on AUD sentiment.  And it would be remiss to not mention that Australia no longer has a ruling majority government, which will likely stifle any growth chances until the next election.

No local data releases today however the Saudi investment conference begins which in the current geopolitical climate may lead to some market moving headlines.