AUD - Australian Dollar
The Australian dollar enjoyed a mostly quiet Tuesday on the economic calendar but an eventful session overnight has led to a small recovery in the Aussie. Opening this morning at 0.6799, the Aussie finds itself probing the 0.68 level despite significant global headwinds.
Initially, it was the RBA that kicked things higher for the Aussie with RBA Governor Lowe speaking a the Armidale Business Chamber Dinner. Interestingly, Governor Lowe was markedly more optimistic than the market had expected and noted that “after having been through a soft patch, a gentle turning point has been reached” and he added “the fundamental factors underpinning the longer-term outlook for the Australian economy remain strong”. Nevertheless, in the Q and A, Governor Lowe refused to rule out a rate cut in October as well as saying the RBA would consider QE in certain circumstances. Following the speech, the market reduced the chances of a rate cut in October which saw the Aussie supported higher.
Moving into Wednesday, the Aussie again enjoys a quiet economic calendar locally. Attentions however will be fixed on our friends across the Tasman as the RBNZ releases their official cash rate. Later in the session, pundits will also look to the developing story of Trumps potential impeachment for direction.
The United States dollar was whittled lower overnight, falling 0.27% to open at 98.33 on the US Dollar Index. It was President Trump that moved the dollar yesterday as the calls for his impeachment escalated. Reports from the Wall Street Journal have noted that Speaker Pelosi will announce a formal impeachment inquiry of Trump. The news comes on the back of a whistleblower revealing that the President encouraged Ukraine’s government to investigate Joe Biden while using foreign aid as leverage. There is also a transcript available that President Trump has so far blocked from release.
Adding to the shaky Greenback was President Trumps hardline stance against China in his speech to the UN, accusing China of a creating an unfair playing field. The clear lack of conciliatory rhetoric during a delicate negotiation helped to destabilise the Dollar further.
The Great British pound was also affected by their local politics with the Sterling kicked higher after the UK Supreme Court ruled unanimously that Boris Johnson’s suspension of parliament was unlawful. Opening this morning at 1.2492, the Sterling moved higher as the chances of a no-deal Brexit continue to be whittled lower.
0.8963 - 0.9039 ▼
0.6131 - 0.6202 ▲
1.8329 - 1.8402 ▲
1.0719 - 1.0787 ▲
0.6771 - 0.6836 ▼