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 Stalls After Stellar Recovery:
The AUD has taken a well earned breather after a stellar run from 0.55 back to 0.65 vs. the Greenback. AUD/USD hit a 17 year low of 0.5505 on March 19 but has since recovered a whopping 10 cents or 18% as global markets cheered on government stimulus, QE and Australia's remarkable ability to avoid the worst of the Covid19 Pandemic.
AUD/EUR paints a similar picture up nearly 20% from a low of 0.5040 on March 19. Earlier this week saw the first stage of restrictions lifted across the country and it'd be fair to expect a further lifting of restrictions as the month wears on and assuming new case numbers remain low. All of this should be bullish for the AUD vs. the EUR, GBP and USD, particularly given the dire situation across the U.S and parts of Europe and the U.K.
Strategy For Importers:
I continue to think the AUD will stay above the lows published in March and would be hopeful we can test 0.7000 before the end of the year. This however doesn't suggest importers should sit back and relax, as market corrections will continue to occur which will drag the AUD lower with it.
My suggestion is Importers should continue to book Forward Contracts as larger orders become due.
AUD EXCHANGE RATES:
AUD/USD – 0.6444
AUD/GBP – 0.5247
AUD/EUR – 0.5935
AUD/NZD – 1.0612
AUD/JPY – 69.097
All Ords (XAO) – 5,497
Gold – A$2,631/oz
Silver – A$23.91/oz
Oil – US$25.62 barrel
DATA RELEASES TODAY:
AUD - Westpac Consumer Sentiment at 10.30am
AUD - Wage Price Index q/q at 11.30am
GBP - Prelim GDP q/q at 4.00pm
USD - Fed Chair Powell Speaks at 11.00pm