News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • 🇪🇸 Markit Manufacturing PMI (NOV) Actual: 49.8 Expected: 50.5 Previous: 52.5 https://www.dailyfx.com/economic-calendar#2020-12-01
  • Forex Update: As of 08:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.44% 🇳🇿NZD: 0.34% 🇨🇦CAD: 0.34% 🇨🇭CHF: 0.27% 🇦🇺AUD: 0.25% 🇯🇵JPY: -0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/VkPBkuh866
  • Heads Up:🇨🇭 https://t.co/IuJgBTnOdA Manufacturing PMI (NOV) due at 08:30 GMT (15min) Expected: 51.3 Previous: 52.3 https://www.dailyfx.com/economic-calendar#2020-12-01
  • Indices Update: As of 08:00, these are your best and worst performers based on the London trading schedule: US 500: 0.88% Wall Street: 0.80% Germany 30: 0.42% FTSE 100: 0.05% France 40: 0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/BxWLQHMZKa
  • Heads Up:🇪🇸 Markit Manufacturing PMI (NOV) due at 08:15 GMT (15min) Expected: 50.5 Previous: 52.5 https://www.dailyfx.com/economic-calendar#2020-12-01
  • Heads Up:🇪🇺 EcoFin Video Conference due at 08:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-12-01
  • Canadian Dollar Aiming Higher on Record GDP Print, Additional Fiscal Aid - https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2020/12/01/Canadian-Dollar-Aiming-Higher-on-Record-GDP-Print-Additional-Fiscal-Aid.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr $CAD $USDCAD $CADJPY https://t.co/NClLIg2NSl
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9Flsqcxo9 https://t.co/D9Lomf7e0C
  • 🇩🇪 Unemployment Rate Harmonised (OCT) Actual: 4.5% Previous: 4.5% https://www.dailyfx.com/economic-calendar#2020-12-01
  • 🇬🇧 Nationwide Housing Prices YoY (NOV) Actual: 6.5% Expected: 5.5% Previous: 5.8% https://www.dailyfx.com/economic-calendar#2020-12-01
Australian Dollar Should Remain Heavy On Global Risk Aversion

Australian Dollar Should Remain Heavy On Global Risk Aversion

2018-02-10 02:35:00
David Cottle, Analyst
Share:
Australian Dollar Should Remain Heavy On Global Risk Aversion

Fundamental Australian Dollar Forecast: Bearish

  • The Australian Dollar is close to six-week lows against its US big brother
  • This can look a bit odd given that the Australian economy is in reasonable shape
  • But the Aussie is a ‘risk asset’ and that means it’s got a few problems now

Trade all the major global economic data live and interactive at the DailyFX Webinars. We’d love to have you along.

The Australian Dollar spend last week at the mercy of broader global economic sentiment and it’s all-too likely to remain there in the coming sessions even though they will offer Australia-watchers a wealth of economic cues.

Fairly or not periods of global risk aversion and market volatility tend to weigh on the Aussie. It’s firmly classed as an asset with a strong correlation to global growth, along with equity. That being so it’s probably not surprising that we should find it close to six-week lows against its American cousin after a week which saw equity markets worldwide under some strain.

It’s not easy to say exactly what caused investors’ sudden rethink about an asset class which previously seemed so well supported. There are any number of possible candidates; fear of rising US interest rates, the possibly re-emergence of inflation or worries that stock valuations were getting ahead of likely reality. Take your pick.

But stocks were pressured and, as a ‘risk asset’ the Aussie was too.

This can sometimes seem a little harsh because the Australian economy is doing reasonably well. The Reserve Bank of Australia evinced cautious optimism when it held interest rates at their record lows last week and, subsequently, in its quarterly policy statement. Business confidence is up, employment levels are rising and even long-dormant consumers are starting to fizz. Wage growth and inflation remain perhaps puzzlingly low, as they do in many other developed economies. Were they to pick up its unlikely that higher Australian interest rates would remain the distant prospect they now are.

The coming week will offer another look at sentiment among both businesses and consumers. There could be some short-term gains for the Australian Dollar if both remain cheerful.

However, the currency is more likely to remain vulnerable to risk appetite well beyond its home country’s shores. If investors start to feel that equity has suffered enough then it and other risk assets- including the Aussie, can probably look forward to some consolidation and perhaps some gains. That said it’s very difficult to predict when waves of selling pressure might hit those global equity markets

Australian Dollar Should Remain Heavy On Global Risk Aversion

All up the Australian Dollar seems to struggling against a resurgent greenback and it’s hard to see anything happening this week which will move that dial too far. It’s a bearish call this week, but one made with the imponderables of world risk appetite firmly in mind.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or us the Comments section below to get in touch

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES