Compass Global Markets' Blog

Market Update - 21st July 2020 - AUD Continues To Edge Higher As Economy Opens Up

Posted by Patrick Downes on July 21, 2020 at 9:06 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 Edges Higher:

The Aussie Dollar has inched higher over the past week, surpassing 0.7000 vs. the Greenback for the second or third time since early June. Despite low interest rates and a persistent lock-down in Victoria, we are seeing a pattern emerge similar to past crisis, with the most recent GFC springing to mind. During the GFC, the AUD which initially fell, went on to be one of the best performing G20 currencies eclipsing the USD in value in within a couple of years. In fact AUD/USD fell to 0.6000 before rallying to 1.1000. While I'm not saying the same thing is destined to occur again, we are certainly performing far better in the battle against Covid than many other G20 countries and that has seen the local currency surge in value since March.

Stocks Bid Up: 

The stock market has also been a beneficiary of free flowing money from central banks and government's across the globe, with the best performing sectors being bio-tech, gold and technology stocks. Tech stocks are benefiting from the shift to online shopping, bio-tech is benefiting from the search for Covid remedies and Gold is surging in value as a result of money printing.

RBA Governor Philip Lowe is due to deliver a speech titled "Covid-19: The Labor Market and Public-sector Balance Sheets" at the Anika Foundation Luncheon and we should therefore hear quite a bit on the RBA's thoughts about where the labour market is headed, unemployment numbers and more. There is probably quite a bit for Lowe to cover and it'll be interesting to follow some of the press following the speech.

AUD EXCHANGE RATES:

AUD/USD – 0.6986

AUD/GBP – 0.5511

AUD/EUR – 0.6100

AUD/NZD – 1.0638

AUD/JPY – 74.955

OTHER MARKETS:

All Ords (XAO) – 6,112

Gold – A$2,589/oz

Silver –  A$28.35/oz

Oil – US$39.81 barrel

DATA RELEASES TODAY:

AUD - RBA Gov Lowe Speaks at 12.30pm

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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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