Market News & Analysis
AUD holds steady while ASX outperforms
Upcoming high impact economic news:
12:30 AUD RBA Governor Lowe speaks
13:00 USD US President Trump’s ‘State of the Union’ address.
00:35 CAD Bank of Canada Deputy Governor Lane speaks.
The U.S. dollar extended its rally with the AUD being the only major currency to hold its ground against the greenback. The U.S. dollar rose more than 80 pips against the Pound on Tuesday and about 30 pips against the Euro. The AUD/USD pair closed the session at 0.7234, reversing Monday’s losses. Today, traders will be tuning in to U.S. President Donald Trump’s State of the Union address in Washington. Trump is expected to speak on the U.S. government shutdown, border security and the Mexico wall.
Brexit continues to weigh on currencies with the Pound now at a 2-week low as investors look towards equities. The London FTSE jumped an impressive 2.04% overnight, the CAC 40 rose 1.66% while the Euro Stoxx closed 49 points higher. The biggest focus for U.K. markets this week is the Bank of England’s monetary policy meeting on Thursday. The central bank is expected to leave interest rates on hold at 0.75%.
Low liquidity and trading levels through Asia this week as Chinese New Year celebrations continue. The Yen was mostly unmoved against the USD and the AUD, closing the session slightly lower. The Nikkei 225 fell 39 points amid weak company earnings.
The ASX continues its stellar run after closing almost 2 per cent higher yesterday. A speech by RBA governor Philip Lowe at 12:30 AEDT will sway the Australian dollar. If Lowe echoes the board’s latest monetary policy statement, we could see another boost in the AUD. However, any hint of an interest rate cut could see the local unit move the other direction.
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