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Market Update

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

Aussie edged lower awaiting US Fed rate decision

Published September 24, 2018

Author: Dennis Li

After looking quite positive in a “risk on” environment at the end of last week, the AUD starts this week under pressure after the Chinese formerly cancelled trade talks with the US. The Chinese stated that they would not negotiate while under duress. In a similar theme, Brexit negotiations deteriorated further after PM May publicly criticising the EU’s treatment of her and the UK at the Salzburg summit.

  • Sterling fell on Friday after UK Prime Minister May said the EU must supply an alternative Brexit proposal after rejecting her plans without a full explanation.
  • According to Canadian Prime Minister Justin Trudeau, US and Canadian negotiators are ‘very likely’ to hold informal trade talks on the sidelines of the UN General Assembly meeting in the next few days.
  • Canada’s inflation rate dipped to 2.8% in August but remained above the central bank’s target, paving way for another rate hike in October.
  • The US is optimistic about finding a way forward in its trade dispute with China after China decided to cancel the upcoming trade talks with the US.

In a week devoid of any real economic data, the US fed decision and accompanying comments on Thursday morning our time take on greater significance. Until then the AUD would be expected to remain in a tight range.