AUD - Australian Dollar
The Australian Dollar remained largely range bound through trade on Friday testing but failing to push through 0.70 US cents. Bonds, equities and currencies traded flat as Investors preferred to sideline themselves in the lead up to the G20 summit and trade talks between President Trump and Premier Xi. While there are still a host of unresolved hostilities in play, talks seemingly went as well as could be expected, effectively mirroring the accord reached at the last meeting in Buenos Aires wherein both parties agreed to a ceasefire. The positive overtones struck by both leaders has bolstered demand for risk assets on open and pushed the AUD through resistance at 0.70 to touch early highs at 0.7036.
Attentions now turn to Tuesday’s RBA policy meeting and rate announcement. With a second rate cut firmly on the table before year end investors will be keenly attuned to the commentary surrounding this RBA policy decision. An upbeat overtone and maintenance of the risk on environment could help push the AUD back toward 0.71 US cents.
The US Dollar edged lower through trade on Friday as key personal consumption inflation data reinforced expectations the Fed will be forced to cut rates later this month. A soft PCE read was largely expected and the broader impact on the dollar was muted, however is underpins a near 2% correction through the last fortnight and opens the door for more than one rate cut before the year is out.
The Euro enjoyed one of its best monthly gains of the last 18 months, bolstered by broader USD weakness enabling a push toward 1.14. While the gap in forward swaps narrowed through the last month the 19 nation combined unit may be nearing the top of its short term bull run. While US forward rates stabilise on talk of a US rate cut, European yields have begun falling again as questions arise as to what the ECB can do to stimulate stagnating inflation and lacklustre growth.
0.6930 - 0.7080 ▲AUD/EUR:
0.6130 - 0.6230 ▲GBP/AUD:
1.7950 - 1.8150 ▼AUD/NZD:
1.0400 - 1.0500 ▼AUD/CAD:
0.9120 - 0.9230 ▲