Global Themes


Aussie jumps on oil hike, Chinese cut

The AUDUSD was at one-week highs in early Monday trading after a strong rally in commodities on Friday and a move to loosen monetary policy from the Chinese central bank over the weekend.

Crude oil jumped 4.6% on Friday after OPEC announced smaller than expected production increases. Other commodities, including iron ore, also gained.

Over the weekend, China announced it would lower its reserve requirement ratio (RRR) in order to spark more lending to small businesses. The RRR is a widely-used tool in China to drive economic activity.

Aussie higher

The AUDUSD climbed 0.9% as it reached the highest level in one week.

The Aussie was higher in most other markets.

The AUDEUR was up 0.4% as it lifted from one-month highs.

The AUDJPY jumped 0.8% as it climbed from near 18-month lows.

Trade fears remain

This week’s Australian data is mostly low impact, with new home sales and private sector credit both due on Friday.

Next week, the focus moves to Tuesday’s Reserve Bank of Australia meeting and Wednesday’s retail sales.

From overseas, US durable goods on Wednesday night and US GDP on Thursday will be the major events, while Thursday morning’s Reserve Bank of New Zealand meeting will be closely watched.

The US-China trade feud will also remain in focus with key Chinese tariffs due to be implemented on 6 July. The build-up to this date could see greater market volatility.

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