Author: Rhys Miles
Cautious optimism at best overnight with a lot of trepidation now pervading the markets as the Chinese dispute Trump’s version of events in regard to his claims that they are seeking to restart trade talks. China’s foreign ministry said their position hadn’t changed and it was unaware of any contact made by senior officials to Trump with Trump exaggerating the significance of low level talks. Additionally, a former New York Fed boss stated overnight that the US Fed needs to stand up to Trump and resist pressure from the White House to lower rates.
Closer to home RBA Governor Debelle warned that the trade war is a significant risk to the Australian economy and global growth and that they would look at other measures if the lower cash rate didn’t work.
Overnight the Dow dropped a further half a percent and the AUD opens for the 20th straight day in the range of 0.6720-0.6825. Gold recommences its rally and oil too rose on the back of expectations of a drawdown in US inventories. A lack of significant economic data today should see the AUD remain within said range against all the majors.
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