Global Themes

AUD

Aussie at 18-month lows as trade tensions bite; RBA due

The Australian dollar was heavily sold again overnight – extinguishing hopes for a recent rally – as trade tensions grew on reports the US was considering leaving the World Trade Organization.

The news saw safe haven markets outperform with the US dollar strongly higher.

Heavy weather

The AUDUSD fell 0.9% as it dropped to the lowest level since January 2017.

The Aussie fell 0.8% versus the euro as European unemployment fell to the lowest level since the GFC.

The Aussie was weaker versus most other markets with the AUDCHF and AUDJPY heavily sold.

RBA cut more likely

Today’s focus is on the Reserve Bank of Australia decision.

The RBA will be closely watched as recent commentary has suggested the central bank has turned more cautious on the Australia economy.

Bond market pricing has seen the market suggest a rate cut is now more likely than a hike for the balance of 2018.

The RBA meets at 2.30pm AEST.

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