Compass Global Markets' Blog

Market Update - 2nd March 2020 - AUD Falls Further Following Week To Forget

Posted by Patrick Downes on March 2, 2020 at 8:51 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 Slammed:

Well the AUD has had a week to forget, losing close to 3 cents vs. the Greenback in one of the most savage sell offs we've seen since the global financial crisis around 12 years ago. We all knew a correction would happen again, but never knew what the catalyst might be. Obviously we now know that catalyst was a particularly viral flu like illness, which has caused market closures, supply chain disruptions and general market hysteria. The AUD is down right across the board and the truth to the matter is no one knows where the selling ends and the buying will start again, AUD/USD may well test the 0.50's or it could turn around swiftly with a successful coronavirus vaccine and accompanying central bank stimulus. The best bet though, is to keep hedging your FX exposures via a Forward Contract.

Chinese Data: 

Chinese data released Saturday not surprisingly showed dramatic drops in economic activity due to containment measures. However things appear to be firing up again in the worlds second largest economy following what appears to be successful containment of the virus' spread within mainland China. Locally we have building approvals data due tomorrow morning, followed by the cash rate decision at 2.30pm tomorrow afternoon. Expectations are that we'll see no cut to interest rates, but the RBA statement might telegraph a cut at their next meeting in April.

AUD EXCHANGE RATES:

AUD/USD – 0.6436

AUD/GBP – 0.5032

AUD/EUR – 0.5821

AUD/NZD – 1.0388

AUD/JPY – 69.100

OTHER MARKETS:

All Ords (XAO) – 6,511

Gold – A$2,452/oz

Silver –  A$25.79/oz

WTI – US$45.31 barrel

DATA RELEASES TODAY:

CNY - Caixin Manufacturing PMI at 12.45pm

USD - ISM Manufacturing PMI at 2.00am

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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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