Compass Global Markets' Blog

Market Update - 13th March 2018 - AUD Higher Despite Weaker Commodities Prices, But Risks This Evening

Posted by Patrick Downes on March 13, 2018 at 9:42 AM

Despite substantially weaker commodities prices over the weekend and yesterday, the AUD managed to make gains almost across the board. In fact AUD/USD was up nearly 100 points since my Friday report while the AUD was up nearly 1% vs. the GBP, EUR and JPY. Base metals which are of course a lifeblood of the Australian economy have all come off a great deal over the past few weeks & following Trump's announcement to put tariffs on steel and aluminium, however when you consider that most of the base metals had had a solid run in the lead up to Trumps Tariffs then you could well see the falls as merely profit taking or returning to the mean before the next leg up. I remain bullish on commodities and therefore also the AUD as lets be honest Australia is built on mining, education and housing. Two of those three are not going away and while higher interest rates may impact the housing market you'd have to think mining and our export of education could well pick up the slack if and when required.

The U.K Parliament delivers its Annual Budget tonight, so it's a no brainer that this will have an impact on AUD/GBP - clients wishing to reduce risk on upcoming GBP exposures may be wise to hedge in advance of the Annual Budget release. Similar scenario with U.S CPI at 11.30pm tonight - CPI is of course the main factor with respect to the U.S Fed's decision to raise rates if at all, and a bullish number could take the chance of a rate hike well past 95% when the Fed meets again next Thursday morning.

AUD EXCHANGE RATES:

AUD/USD – 0.7872

AUD/GBP – 0.5660

AUD/EUR – 0.6379

AUD/NZD – 1.0789

AUD/JPY – 83.764

USD/BTC – $8,925

COMMODITIES/EQUITIES: 

All Ords (XAO) – 6,101

Gold – A$1680/oz

Silver –  A$21.00/oz

WTI – US$60.24/barrel

DATA RELEASES TODAY:

GBP - Annual Budget Release at 10.30pm

USD - CPI at 11.30pm

***Above rates are indicative wholesale rates and intended as a guide only***

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick - 0431 278 632 

  Email Patrick: patrick@compassmarkets.com

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Topics: Market, Report

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