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Market stagnant ahead of G20 summit

Published June 25, 2019

Author: Rhys Miles

With the G20 meeting commencing this weekend in Japan, yesterday was always going to be quiet. Both the US and China are making conciliatory overtones and talking about the need for compromise.

The AUD enjoyed and continues to enjoy an ever so slow appreciation that sees it gradually moving towards 0.7000 after RBA Governor Philip Lowe said it would be legitimate to question the effectiveness of global monetary policy easing to boost economic growth. A slight improvement in the cross rates with the AUD improving against both the EUR and GBP.

With the market factoring in an almost 80% likelihood of an RBA rate cut next week the rally on the AUD is expected to be short lived.

Tension between the US and Iran further escalated after US President Trump said the US will impose new sanctions on Iran in response to Tehran’s downing of a US drone last week.

With only secondary market data out this week until Thursday’s US GDP not a lot of movement is expected in either currencies or equities.