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.
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.
*The arrows indicate how the base currency performed against the counter currency overnight. 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 judgment with respect to any matter contained herein.