• richard evans

AUD stronger after hawkish RBA

Good morning

Going to have to keep it a little brief this morning as I’m off to an early shoulder session with the physio. I can hear your sighs of relief from here.

In truth there wasn’t a great deal of news out of the currency markets yesterday. GBP held its ground against the dollar and has actually pushed a little higher this morning, the single currency fared less well, trading down to 1.0980, leaving the pund looking healthier against the EUR with EURGBP 0.8355 (GBPEUR 1.1970), quite a turnaround from last week which saw the pair at 0.8510 (1.1750). I’m not sure if Le Pen doing well in the French polls has had any impact on the Euro but it is certainly worth keeping an eye on the political situation in France.

I can only think the fears that Russia are not withdrawing but regrouping has helped the EUR sell off, reports suggest Russia are adding thousands of troops in the East for a war that could last months. Meanwhile more evidence of atrocities committed by Russian soldiers continues to emerge. Talk of more sanctions being discussed and I did read that US have stopped Russian bond payments although I’m not sure on the actual details of that. I’d be pretty unhappy if I was a bondholder expecting my coupon payment.

AUD was a big mover overnight after a more hawkish than expected RBA. They kept rates unchanged at 0.1% but seem to be moving nearer to tightening, the dropping of certain words such as ‘patience’ in their statement was enough for many to look for a possible rate rise in May. AUDUSD traded from 0.7540 to 0.7625, AUDNZD up from 1.0830 to 1.0900 and GBPAUD down from the mid-1.74s to 1.7220, right on the Dec 2018 lows.

I know two people looking to move to Australia, just back in mid-Feb I spoke to one who was happy with the rate at 1.90 but, despite my common sense approach, wanted to hold out for a little more, unfortunately this shift lower has cost them a decent amount of money. Remember RBA have not yet even started to raise rates, so there is a chance of further AUD gains. 0.8000 a target for some in AUDUSD.

I’m going to have to leave it there, We have a pretty light calendar today, a couple of Fed officials speaking later. Many people have gone away for the Easter holidays and with the schools off there is something of a holiday feel at the moment. And its been raining of course, that always seems to mark the start of holidays here!

- 13.30 US goods trade balance

- 13.30 CAD Intl trade

- 15.00 US Services ISM

- 16.05 Feds Brainard speaks

- 19.00 Feds Williams speaks

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