The A$US$ bounces as forecast.

April 10, 2018

Finport Currency Brief - Courtesy of Compass Global Markets.

 

Good morning all;

 

AUDUSD: As I suggested in Monday's report we have seen some pull back in the trade war standoff , especially from Chinese President Xi Jingping who said they will look to open China's economy with lower import tariffs. This has seen risk appetite back on the table for investors and resulted in recovery for the Australian Dollar, commodities and equity markets. Focus for today is on a speech by RBA Governor Lowe, however that will be overshadowed by US inflation data tonight. We may have a bumpy few days ahead, but the upward trend is firmly in place.

 

AUDEUR: The A$'s recovery was negated by European Central Bank member Nowotny, who said the central bank plans to stop pumping money into the system through the asset purchase program - which will allow them to hike interest rates in due course. This comment was unexpected and has kept the exchange rate trading at 0.6250 levels. ECB President Draghi speaks this evening; so I'd expect a sizeable move  come 9pm Sydney time with any denial or confirmation of his colleagues statement. 

 

AUDGBP: With no UK centric news overnight the A$ has strengthened here and back to levels seen last week. UK Manufacturing data comes this evening and Friday's speech by Bk of England Governor Carney is the only other focus this week. Neither of which are expected to throw up any great shocks, so I'd expect this 0.5450 level to hold until next weeks "heavier" data releases. 

 

Jim Devonport

E: jim.devonport@finport.com

M: 0415 066 468 


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