Author Rowan Murphy
The Australian Dollar has found itself on the wrong side of risk opening this morning at essentially decade lows. It struggled heading into the local close last week, briefly managing to trade above 0.6600 it has opened again this morning quickly slipping back below this level already.
Given the coronavirus updates the market has been receiving it’s no wonder that it has come off in concert with spikes in the VIX (fear index). Over the weekend there were several reports of a spike in coronavirus cases in parts of China (outside Hubei), as well as in South Korea, Italy, Iran and Japan and that the incubation period (which the world had been using to quarantine potential carriers) could be substantially inaccurate. This has continued to suppress market sentiment as market participants consider the idea that perhaps the virus isn’t as ‘under control’ as previously assumed.
That’s put downward pressure on risk, yes even reflected in equities. There’s been a clear play into safe-haven assets with the Dollar’s (DXY) continuing rally, trading at 3 year highs, and 10 Year US Treasuries testing life below the 1.50 level, suggesting the market may be re-evaluating the global growth outlook.
The currency is being battered from all corners currently as participants increase their bets that the next RBA meeting is ‘live’ for a rate cut after last month’s unexpected lift in the unemployment rate and obviously there is an extraordinary move into the safety (being the US Dollar) from markets with the potential non-containment of the coronavirus. With a relatively light week of data expect the markets to be directed by risk appetite and coronavirus updates.
© Copyright - EncoreFX, 2018.EncoreFX (Australia) Pty Ltd ABN 42 607 244 879 AFSL 479 870 is the issuer of the financial products in Australia. The information on this website has been prepared without taking into account your objectives, financial situation or needs and so before acquiring any financial services or products from EncoreFX, you should consider the appropriateness of the information having regard to your own objectives, financial situation or needs. You should obtain the product disclosure statement (PDS) for the relevant product and consider the PDS before making any decision to acquire the product. The information on this website is not directed at residents of any country other than Australia and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. It is the responsibility of visitors to this website to ascertain the terms of, and comply with, any local law or regulation to which they are subject.
Adam Nikitins and Stewart McCallum were appointed Joint and Several Voluntary Administrators of EncoreFX (Australia) Pty Ltd on 30 March 2020.
Rees Logan, Adam Nikitins and Stewart McCallum were appointed Joint and Several Voluntary Administrators of EncoreFX (NZ) Limited on 30 March 2020.
Any queries regarding the Administrations should be directed to firstname.lastname@example.org.