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Market Update

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

Aussie breaks through recent support of 0.7250

Published September 28, 2018

Author: Dennis Li

We saw the Aussie fall by 0.76% overnight on the back of a resurgent USD boosted by the Fed’s outlook for more rate hikes beyond this year as well as the weakening of EUR over worries about the Italian budget. The AUDEUR edged slightly higher given the greater rate of decline on the EURO.

  • Fed’s Chairman Powell delivered a new message to financial markets: watch the data on jobs, wages and inflation for signals on monetary policy – not the US central bank’s statement or forecasts.
  • US economic growth in Q2 remained unchanged at 4.2% as previously estimated – the fastest in the last 4 years.
  • The number of Americans filing for unemployment benefits increased more than expected last week as Hurricane Florence temporarily displaced some workers.
  • German Chancellor Merkel said on Thursday that some parts of British Prime Minister May’s Brexit proposal with the EU worked well but the crucial question of how to leave the single market remained complicated.
  • Bank of England Chief Economist Andy Haldane said on Thursday that the central bank could change the decision from raising to cutting interest rates if there was a disorderly, no-deal Brexit.
  • European Central Bank President Mario Draghi said on Thursday that financial policymakers need more tools and data to regulate investment funds and other so-called ‘shadow banks’ after a boom in the industry.
  • German inflation increased more than expected in September supporting ECB President Draghi’s plan to gradually wind down monetary stimulus.

With the public holiday in next Monday, the Aussie could potentially have a quiet start in the next week as investors await the RBA rates decisions released on Tuesday which is widely expected to remain unchanged.