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Market Summary - 14th October 2020

AUDUSD

Open today 0.7161

Yesterday’s Range 0.7150 / 0.7219

NZDUSD

Open today 0.6651

Yesterday’s Range 0.6629 / 0.6671

AUDNZD

Yesterday’s Range 1.0764 / 1.0856

News that China had stopped taking Australian coal shipments continued to weigh on the AUDUSD in overnight trading. US-strength as investors moved to safer haven assets, also added pressure to the pair. News that Johnson & Johnson has paused trials of their Covid vaccine due to unknown side-affects rattled markets through Asia and northern hemisphere. Traders today will monitor ‘risk-off’ fundamentals for clues to immediate direction. Westpac Consumer Confidence release this morning the only notable data on the radar today for Oz.

Wall Street stocks reversed lower as Johnson & Johnson and Eli Lilly halts trials of their Covid vaccine and ‘bumbling’ progress for a US stimulus package continues to sour investor risk appetite. Much the same expected for Australian shares today.

Gold prices were capped by USD strength and finished the day 1.5% lower. Copper prices slipped lower despite China manuf data coming in stronger, as markets remain cautious over the time line for economic recovery with vaccine trials interrupted. Crude Oil , one of the few commodities to enjoy a run up for the day, as this market was encouraged by the China data.

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This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgement with respect to any matter contained herein.

Market Update

The AUDUSD opens the week on a cautious footing as recovery attempts fail above 0.72-cents. The pair is now looking for a fresh signal to resume its rally. A strong uptick in business activity in the US has helped the US-dollar overnight and consequently pressured the AUD and other risk assets. Pandemic virus numbers have stabilized in the US and vaccine hopes are circulating a more positive outlook. Congress, however, has gone quiet over the much awaited US stimulus package as Democrats continue to restrict discussions. In light of a quiet week ahead on data releases, expect that US-China trade discussions, Covid , the US stimulus package and corporate activity will be the headlines to focus on for day-traders to kick off the week.

Wall Street continues to defy logic, as it once again post gains for the week supported by a jump in US business activity and home sales. Both the Nasdaq and S&P500 posted record highs to finish the week. Australian shares are expected to open the week lower as the nation continues to struggle with the second wave of Covid pandemic.

Gold slipped lower as the US-dollar made gains and dented the lustre metal’s status.

Base metal prices eased with both Iron Ore and Copper posting declines for the session.

Oil prices again posted declines as reports of oversupply and resurgence of pandemic outbreaks frustrate the economic outlook.

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Market Update

The AUDUSD crashed lower yesterday, following a White House staffer, Navarro, suggesting trade agreements between US and China had broken down only to see him later retract his comments and Trump come out and reaffirm that they were still intact, rebounding the Ozzy to where it had begun at 0.6930. Overnight the pair hurdled resistance at 0.6935 and 0.6950 to test the 0.6977/80, which remains in tact this morning. In the absence of any local data today the pair will continue to follow headlines and rumours for direction.

The Kiwi has rallied also on confidence that economic recovery is optimistic albeit  around new cases of coronavirus emerging. Bullish signal still holds for the NZDUSD.

Wall Street received a boost with improving economic data and chance of more economic stimulus on the horizon. Tech stocks also continue their winning streak, lifting the Nasdaq. Asia bourses expected to open firmer today.

Gold trades to its highest level since 2012, driven by Central Bank monetary stimulus packages and weaker USD.

Copper prices continue to strengthen as Trump re-assures China-US deals are still in place and stronger than expected economic data bolstered hopes for a quicker recovery.

Oil prices steady and taking a breather after gains earlier in the week.

Market Update

After starting the week with the AUDUSD under pressure in thin opening trading and with AUDEUR selling flows, market depth bettered and the pair crawled back to 0.6830’s. RBA Gov Lowe was the focus initially, suggesting that a lower AUD was preferable but did not consider the currency to be overvalued against the USD. Amongst other comments, he also suggested that low cash rates likely to remain at record lows for years and slow growth to persist for some time. All-in-all, his comments had little impact on the morning market.

Overnight the Ozzy pushed over 0.69-cents again as traders look through the difficulties on the lockdown opening and bet on a forthcoming recovery. The AUD gains were also supported by a softer USD. Buoyant equity prices and commodity gains are likely to temporarily underpin the gains into the Asia session, though any negative headlines are likely to rattle the bulls in light of little significant economic data releases locally.

The Kiwi has opened up a technical bullish signal and eyes off 0.65-cent resistance next.

Wall Street closes higher with a boost from tech stocks.

Gold trades higher as viral pandemic concerns prevail around secondary cases.

Copper remain positive, reinforced by constrained inventories and strong demand from China.

Oil prices rose 2% as tighter crude supplies prevail as lockdown opens up.

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This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgement with respect to any matter contained herein.