EncoreFX’s daily market updates are written by our experienced and professional dealing team.
Author: Nicholas Cork
After easing lower yesterday below 0.7250 following a weak trade balance release, extreme volatility in equity markets then set the tone for the AUDUSD overnight, as it tried in vain to track an erratic DOW. News that Canada had arrested the CFO of Huawei and were possibly extraditing to the USA spooked the market in the US session, (although the story was 12 hours old), with the DOW down 800 points within a few hours. This saw the AUD drift back down to 72 cents before a 700 point plus recovery in the DOW helped the AUD back up towards 0.7230 again where it sits this morning. Very evident was a quick flight to traditional safe haven currencies the CHF and the YEN when the DOW collapsed, so the market sentiment does seem to be on a knife-edge currently. Note that AUDcrosses are down across the board this morning.
Overnight the RBA Deputy Governor said in a speech that “the Reserve Bank has repeatedly said that our expectation is that the next move in monetary policy is more likely up than down, though it is some way off, but should that turn out not to be the case, there is still scope for further reductions in the policy rate.” Interesting timing following our weak GDP release this week, and the market has now further reduced their bets on any hikes in 2019.
No local data today – China has a slew of economic releases over the next few days to be watched. Have a nice weekend.
© 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.