Compass Global Markets' Blog

Market Update - 14th December 2018 - AUD Lower In Choppy Trade Overnight & Hints Next Move From RBA May Be A Cut

Posted by Patrick Downes on December 14, 2018 at 8:39 AM

The Aussie Dollar is lower against the Greenback, Euro and Pound but up vs. the Kiwi following a mixed session overnight for U.S and European equities. In the U.S the Dow ended up 0.29% while the NASDAQ fell 0.39% and in Europe a similar theme with Euro Stoxx 50 up 0.15% while the UK FTSE and German DAX finished lower by a very insignificant 0.04%. Chinese/U.S trade tensions are continuing to simmer but small steps in the right direction appear to be forthcoming. Examples of this include China resuming imports of U.S soybeans while overnight a reiteration from Beijing that "its officials were in close contact with Washington counterparts."

Locally, a lot of talk on Financial Twitter (FinTwit) and in local news outlets is speculation that the next move from the RBA could be a rate cut as opposed to the before-mentioned likelihood that the next move would be a rate hike. Local economic data has been choppy at best lately, with strong employment growth and incremental wage increases offset by continued poor retail sales numbers, weak housing market and recent below expectations GDP data. Certainly it's hard to determine what the next RBA move will be and it depends alot on the data, but should they begin to hint at a rate cut as opposed to a rate hike then their is a chance we see a significantly lower AUD, the opposite is true if the RBA stays on course with their bullish GDP predictions.

A lower AUD is great for exporters, but for importers not so great. Those clients with razor thin  margins or who'd like to lock in their profits on their imports would be advised to use Forward Contracts. The AUD has been in decline for the better part of a year and those clients utilising Forward Contracts have been far better off than those simply paying at spot.

AUD EXCHANGE RATES:

AUD/USD – 0.7194

AUD/GBP – 0.5674

AUD/EUR – 0.6326

AUD/NZD – 1.0490

AUD/JPY – 81.745

USD/BTC – $3,236

OTHER MARKETS:

All Ords (XAO) – 5,735

Gold – A$1,720/oz

Silver –  A$20.44/oz

WTI – US$53.29/barrel

DATA RELEASES TODAY:

USD - Core Retail Sales m/m at 12.30am (tomorrow morning)


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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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