Compass Global Markets' Blog

Market Update -20th May 2020 - AUD Holds Ground As Equities Slip On Covid19 Headlines

Posted by Patrick Downes on May 20, 2020 at 9:18 AM

Please note that the commentary below is factual information provided to a group of readers as a web blog, and where an opinion is expressed by the author, it is GENERAL ADVICE only.

AUD holds ground:

The AUD has consolidated above 0.65 vs. the Greenback, 0.53 vs. the GBP and 0.59 vs. the Euro and it's held up well despite a sell off on equity markets overnight. U.S and European stocks mostly slipped, with the exception being the DAX which broke ranks with a 0.15% gain, well above the 0.5% to 1.5% losses seen elsewhere on equity markets. The Dow was the worst performer losing around 400 points but remains a solid 6,000 points above the 24th March low of 18,191.

25,000 on the Dow Jones seems like a crucial level for U.S equities, while locally the ASX200 will need to push through 5,500 for this bull market to continue. Both equity markets have had difficulties to maintain momentum at these key levels and the ASX looks like it'll struggle again to push through without a significant catalyst.

Lack of data:

No economic data again today which continues a quiet week on the data front. The latest Covid19 news though is that Moderna's vaccine trials are not going as well as planned and the headline probably explains a bit while equity markets struggled overnight. Vaccine headlines have become the new trade war headlines as one Twitter commentator put it recently.

Hedging:

Importers should consider hedging with Forward Contracts up here as we've seen a great run from March lows. Last thing you want to do is become complacent, not hedge and then deal at significantly lower levels.

AUD EXCHANGE RATES:

AUD/USD – 0.6506

AUD/GBP – 0.5304

AUD/EUR – 0.5951

AUD/NZD – 1.0723

AUD/JPY – 70.177

OTHER MARKETS:

All Ords (XAO) – 5,658

Gold – A$2,668/oz

Silver –  A$26.51/oz

Oil – US$31.70 barrel

DATA RELEASES TODAY:

No economic data

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick - 0431 278 632 

  Email Patrick: patrick@compassmarkets.com

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 DISCLOSURE AND DISCLAIMER - GENERAL ADVICE WARNING
The information provided in this report has been prepared without taking into account your particular objectives, financial situation or needs. You should consider whether our products are appropriate for you and read the FSG and PDS which are available on this website.
This report and must not be copied, either in whole or in part, or distributed to any other person.
All references to prices, amounts and currency are in Australian dollars unless otherwise noted.
This report is provided for Australian residents only and is not intended for use by residents of any other country.

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