Compass Global Markets' Blog

Market Update - 19th March 2018 - AUD/USD Gets Hammered In Final 48 Hours Of Trading, Stocks Flat or Higher With Commodities

Posted by Patrick Downes on March 19, 2018 at 8:56 AM

The final trading session of the week finished without much fanfare in the early hours of Saturday morning. The final result saw the Nasdaq flat while the majority of the other U.S and European indices finished up about 0.3%. The Euro Stoxx 50 and Spanish IBEX performed best up 0.7% and 0.8% respectively. Locally Asian markets lost ground while the ASX200 bucked the trend up half a percent. Commodities prices which have been off the boil over the past month or so managed to make marginal gains and look to have found support after a long and consistent run higher since the middle of last year. Corrections always happen and I guess you could probably call this a correction for commodities and metals in what appears to be a new bullish commodities cycle led by the EV metals such as lithium, nickel, cobalt and copper.

The Aussie dollar has not fared as well having dropped quite dramatically during the last 24-48 hours of the trading week. In fact AUD/USD has come off nearly 200 points or 3% since Thursday morning on the back of a likely rise in interest rates by the U.S Federal this coming Thursday morning.  Which brings us to the data announcements for this week and the likely risks for the Aussie dollar. Nothing much out today, but G20 meetings kick off tonight which run for 2 days and involve the top 20 trading nations on the globe. But as mentioned a few sentences ago the big event of the week is the U.S FOMC Federal Funds Rate decision at 5.00am AEST on Thursday morning. All indications are that we'll see a further 25 basis point increase in interest rates to 1.75%, but this has likely already been priced into the market, so the real risks for AUD/USD are in the rate statement or announcement that comes along with the increase in rates. If the Fed appears bullish on the economy and therefore interest rates then we may see further falls in AUD/USD. So certainly a lot happening and I'll keep you posted as well as I can.

AUD EXCHANGE RATES:

AUD/USD – 0.7714

AUD/GBP – 0.5532

AUD/EUR – 0.6277

AUD/NZD – 1.0685

AUD/JPY – 81.794

USD/BTC – $7,897

OTHER MARKETS: 

All Ords (XAO) – 6,054

Gold – A$1702/oz

Silver –  A$21.18/oz

WTI – US$62.30/barrel

DATA RELEASES TODAY:

G20 Meetings

***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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