Finport Currency Brief - Courtesy of Compass Global Markets.
Our forecast AU$US$ leg higher gathered pace yesterday and has carried on in the same fashion this morning. The move started with a less than negative speech by RBA Governor Lowe, which was then added to by weaker than expected US inflation data overnight. The pair didn't sit around for long as the US central bank hiked interest rates, as widely expected, but made comments that inflation remains low. The market subsequently priced out a third interest rate hike in 2018, hence why we sit 1.5% higher than yesterday and 3.6% higher over the week.
We favour higher levels still, but in a choppy range as importers jump on more advantageous exchange rates. 0.80c in the New Year anyone?
With the troubles in Europe and our local data beating expectations, AU$Euro is now at 1 month highs. We do not expect the move to go too much further to go today with the European Central Bank meet this evening. Therefore those with Euro invoices may want to give us a call.
Interestingly the downward AU$GB Pound trend has been broken as UK Prime Minister May lost a key BREXIT bill vote. Her time in power seems to be getting shorter and shorter. The Bank of England also meet this evening, however it is the political turmoil driving the Pound at the moment and we could see our 0.58 target hit this side of Christmas.
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