11 June 2020 - AUD eases from the post-FOMC top of 0.7063,highest level since July 2019.


Good Morning,

Market Headlines

The FED left rates unchanged with its narrative seen as more amenable than what the market was expecting. CPI inflation came in lower than expected with equity markets providing a mixed result, S&P500 currently 0.5% lower. Brent up 0.5% to $41.35, Copper jumped 3.5% to a five-month high, iron ore slipped to $103.40 and gold is up 1.2%.

Currencies

AUD rallied to its highest level since July 2019 going from 0.6980 to 0.7063

EUR overnight range 1.1345 to 1.1422 – a three-month high.

USD/JPY fell from 107.50 to 106.99 – a one-month low.

NZD rose from 0.6530 to 0.6584 – a four-month high.

AUD/NZD rose from 1.0680 to 1.0730.

AUD Thoughts

- AUD/USD eases from the post-FOMC top of 0.7063, also the fresh high since July 2019.

- FED maintained a dovish tone with downbeat forecasts/projections joining no rate change.

- China’s inflation numbers, Aussie Westpac Consumer Confidence flashed soft data.

- Australia’s Consumer Inflation Expectations and the US-China can entertain markets amid a light calendar.

Looking forward, markets might have to rely on the news headlines for fresh impetus amid a light calendar in Asia. Nonetheless, Aussie Consumer Inflation Expectations for June, expected 4.2% from 3.4% prior, might offer intermediate moves.

Despite the AUD's limited capacity to stay above 0.7000, it remains in the vicinity of five-month tops off-late. Also, the quote’s ability to keep the bulls happy beyond 200-day SMA speaks loud of the Aussie pair’s price strength

Event Risk Data Today

Australia: June update of MI inflation expectations.

New Zealand: Retail card spending

US: May PPI is expected to recover to 0.1%. Initial jobless claims are also due.

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