Compass Global Markets' Blog

Market Update - 26th July 2017 - Commodities Surge Higher Ahead of CPI Figures & U.S Fed Rate Announcement

Posted by Patrick Downes on July 26, 2017 at 8:29 AM

U.S consumer sentiment figures along with global investor sentiment surged overnight sending commodities and equities higher while limiting gains for more risk averse assets like Gold, which remains locked in the doldrums around 1,250USD an ounce. However, bullish bets on Gold are rising as the precious metal remains at historically low valuations - personally I've been accumulating positions in Gold.

The best performing commodities overnight were base metals Nickel, Copper and Iron ore which all gained over 3%, importantly iron ore prices are now back above the psychological level of US$70 a tonne. What all this means for the Aussie dollar is really more of the same, higher highs or at worst consolidation around current levels above 0.7900 vs. the Greenback and 0.6800 vs. the Euro.

Aussie CPI figures along with a speech from RBA Gov. Lowe today could have an impact on AUD so best to book payments early ahead of the economic data and speech. The last set of speeches from RBA members sent AUD sharply lower last week. CPI is expected to come in around 0.4% for the latest quarterly reading. In addition to this local data we have the latest from the U.S Federal Reserve around 4.00am tomorrow morning, expert estimates suggest they'll hold rates steady at 1.25% but we could still see some movement based on the accompanying FOMC statement and speech. Watch this space.

AUD EXCHANGE RATES:

AUD/USD – 0.7936

AUD/GBP – 0.6091

AUD/EUR – 0.6814

AUD/NZD – 1.0697

AUD/JPY – 88.802

DATA RELEASES TODAY:

AUD - CPI at 11.30am

AUD - RBA Gov. Lowe speaks at 1.05pm

GBP - Prelim GDP at 6.30pm

USD - FOMC Statement & Federal Funds Rate at 4.00am (tomorrow morning)

***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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