Compass Global Markets' Blog

Market Update - 7th February 2019 - AUD Slammed As RBA Governor Lowe Suggests Next Move A Cut

Posted by Patrick Downes on February 7, 2019 at 8:41 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 Savaged By RBA Comments:

The AUD fell yesterday as RBA Governor Lowe in a speech at the National Press Club in Sydney suggested slow growth & inflation could force the RBA to lower interest rates if economic data didn't improve as they expect. Essentially they began the process of telegraphing to the market that the next move may be a rate cut as opposed to a rate hike. This speech followed the RBA statement on Tuesday which removed some key wording about the next move likely to be a rate rise and was obviously quite a shock to the market; as a result the AUD dropped almost immediately by over 1% yesterday across the board. This morning we're down further, with AUD/USD the worst performer back below 0.7100.

Equities Set To Open Higher:

Aussie equities performed well yesterday while overnight U.S & European equities declined but only marginally. Our local market is expected to open around 0.17% higher this morning. Metals prices after a great run through January have started to sell off a little in the early part of February, but some forecasts have copper, zinc and iron far higher by year end which would certainly be bullish for our major miners like BHP, RIO, FMG and even the refurbished New Century Zinc mine which is reprocessing tailings from the old Century Zinc mine.

AUD EXCHANGE RATES:

AUD/USD – 0.7088

AUD/GBP – 0.5471

AUD/EUR – 0.6232

AUD/NZD – 1.0393

AUD/JPY – 78.001

OTHER MARKETS:

All Ords (XAO) – 6,091

Gold – A$1,835/oz

Silver –  A$22.02/oz

WTI – US$54.17/barrel

DATA RELEASES TODAY:

China – Bank Holidays all week (no payments processed)

USD – Fed Chair Powell Speaks Speaks at 11.00am


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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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