There is an old adage in finance 'sell in May and go away', however what asset classes it relates to depends on who you speak to and from what part of the world they live in. Traditionally it's meant selling stocks in May as you typically see a self fulfilling prophecy where by traders are so nervous about equities falling in May that they end up cutting positions and continuing the cycle. Trying to determine whether 'sell in May and go away' relates to the Aussie dollar is a different kettle of fish and probably has more to do with macro economic drivers rather than old sayings.
The Aussie isn't much changed since Friday morning but we do have a bit of economic data out of the U.S tonight along with of course the RBA Cash Rate decision tomorrow at 2.30pm. A lot hinges on the decision the RBA makes tomorrow but the market is expecting to see no change in interest rates from 1.5% despite the still simmering housing market and continual debate about how to fix housing affordability in the Eastern states. If the RBA were to hike though we would likely see quite a dramatic rise in the Aussie as a result of it being presumed extremely unlikely by the markets, so certainly something to watch closely as we do every month. U.S Treasury secretary Mnuchin speaks tonight along with U.S manufacturing data.
DATA RELEASES TODAY:
USD - Treasury Secretary Mnuchin speaks at 9.45pm
USD – ISM Manufacturing at midnight AEST
AUD EXCHANGE RATES:
AUD/USD – 0.7431
AUD/GBP – 0.5736
AUD/EUR – 0.6822
AUD/NZD – 1.0846
AUD/JPY – 82.768
***Above rates are indicative wholesale rates and intended as a guide only***
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Senior Corporate FX Dealer
Phone Patrick - 0431 278 632