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
EUR/USD
Bullish
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
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
Bullish
GBP/USD
Bullish
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
USD/JPY
Bearish
More View more
Real Time News
  • British Pound Price Outlook: GBP/USD, GBP/JPY, EUR/GBP Key Levels - $GBPUSD poised to push higher after breaching key resistance. - $GBPJPY rebound struggling to break above the August low. - $EURGBP coiling up above key support https://www.dailyfx.com/forex/technical/home/analysis/gbp-usd/2020/10/22/British-Pound-Price-Outlook-GBPUSD-GBPJPY-EURGBP-Key-Levels.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr $GBP https://t.co/Qr9Tl7Qse9
  • The US Dollar is once again losing ground against #ASEAN FX as $USDGD and $USDIDR may be readying to extend losses. Will $USDMYR and $USDPHP follow? - https://www.dailyfx.com/forex/technical/article/special_report/2020/10/22/US-Dollar-Technical-Forecast-USDSGD-USDIDR-USDPHP-USDMYR.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/olomq6jsAD
  • 🇹🇭 Balance of Trade (SEP) Actual: $2.230B Expected: $3.55B Previous: $4.35B https://www.dailyfx.com/economic-calendar#2020-10-22
  • Brush up your knowledge on trade-wars with this tool from DailyFX research briefly outlining trade-war history dating back to the early 1900s here: https://t.co/ZWaL6laTU5 https://t.co/MX68zib6BX
  • https://t.co/2ITVYWYrf4 https://t.co/PBzWTjcs05
  • Market Update $USD and $JPY slipping from session-high as the risk-sensitive $AUDUSD attempts to claw back lost ground #ASX200 continuing to storm higher while #gold, #crudeoil and #SP500 futures struggle to rebound from session-lows
  • Heads Up:🇹🇭 Balance of Trade (SEP) due at 03:30 GMT (15min) Expected: $3.55B Previous: $4.35B https://www.dailyfx.com/economic-calendar#2020-10-22
  • The Hang Seng Index shrugged off US election risks and erased some earlier losses. Will it attempt to break through a key resistance at 24,750 and open the room for further upsides? https://t.co/7yccetD8JA
  • Crude oil prices extend losses after falling 4% as sentiment soured. The API report showed an unexpected rise in US stockpiles, dragging the energy sector lower. Besides, fading hope for an immediate stimulus package and rising coronavirus cases also weighed demand prospects. https://t.co/X2om6N6jMZ
  • Wall Street Futures Update: Dow Jones (-0.72%) S&P 500 (-0.77%) Nasdaq 100 (-0.75%) [delayed] -BBG
Australian Dollar May Extend Fall Despite Easing Covid-19 Restrictions

Australian Dollar May Extend Fall Despite Easing Covid-19 Restrictions

2020-09-26 00:00:00
Daniel Moss, Analyst
Share:
AUDUSD

Chart created with TradingView

Australian Dollar Fundamental Forecast: Neutral

  • The planned easing of coronavirus restrictions in Melbourne – Australia’s second largest city – may temporarily halt the Australian Dollar’s retreat from yearly highs.
  • Growing expectations that the RBA will cut rates in October could continue to weigh on AUD.

The Australian Dollar is at risk of extending its retreat from the yearly high set on September 1 ahead of the Reserve Bank of Australia’s interest rate decision on October 6, despite the planned easing of coronavirus restrictions in Melbourne – Australia’s second largest city.

AUD Forecast
AUD Forecast
Recommended by Daniel Moss
Get Your Free AUD Forecast
Get My Guide

Melbourne Transitioning to Next Stage of Reopening Roadmap may Underpin AUD

With the 14-day rolling average of Covid-19 infections falling to 25.1 and the virus growth rate drifting below 0.5, Melbourne is poised to move to the second stage of Victorian Premier Dan Andrews’ reopening roadmap” on September 27.

However, Andrews warned that “Sunday will not be a day of massive steps [and] is not a day when we essentially throw the doors open”, adding that instead it will be a series of “steady and safe steps” to ensure that there is a “gradual and continued decline in these numbers”.

Although the next phase of the roadmap is unlikely to see a return to normalcy in Australia’s second largest city, the consistent decline in infections combined with the gradual easing of restrictions could underpin the Australian Dollar against its major counterparts in the near term.

Australia Daily COVID Cases Melbourne

RBA Expected to Cut Rates in October

Having said that, recent comments from the Reserve Bank of Australia’s Deputy Governor Guy Debelle appear to suggest that the central bank could ease monetary policy settings further in October “given the outlook for inflation and employment is not consistent with the Bank’s objectives over the period ahead”.

Debelle listed several policy options that “the Board continues to assess” which included adjusting the central bank’s current bond purchasing scheme to supplement the “three-year yield target” and potentially lowering the “current structure of rates in the economy a little more without going into negative territory”.

This suggests that the RBA could be considering cutting the Official Cash Rate (OCR) from 0.25% to 0.1% and potentially introducing “a program of government bond purchases beyond that required to achieve the 3-year yield target”. In fact, it seems the market has taken heed of the Deputy Governor’s comments, with futures markets pricing in a 72% chance that the central bank cuts the OCR to 0% in October.

ASX 30 day interba nk cash rate futures

Source – ASX

Nevertheless, there is a distinct possibility that the market could be getting ahead of itself given Governor Phillip Lowe has previously questioned the benefit of easing rates by a miniscule 15 basis points and the Australian Government is scheduled to announce its budget for 2020-2021 on the same day as the RBA rate decision.

Moreover, with Treasurer Josh Frydenberg announcing the simplification of the responsible lending laws imposed in the wake of the 2008 global financial crisis, to ensure that “there are no unnecessary barriers to the flow of credit to households and small businesses”, the need for further monetary stimulus may not be as dire as previously thought.

To that end, the upcoming manufacturing PMI release for September and retail sales data for August could dictate the near-term outlook for AUD, with better-than-expected results probably easing rate-cut bets and in turn underpinning the local currency.

-- Written by Daniel Moss, Analyst for DailyFX

Follow me on Twitter @DanielGMoss

Building Confidence in Trading
Building Confidence in Trading
Recommended by Daniel Moss
Building Confidence in Trading
Get My Guide

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

DISCLOSURES