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.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
Gold
Bearish
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Real Time News
  • Heads up: Australia’s ANZ Roy Morgan Weekly Consumer Confidence Index (OCT 20) is due at 22:30 GMT (15 min) Est: N/A Previous: 110.9 #AUD
  • RT @Reuters: Chile's Larrain says civil unrest will 'undoubtedly' have an impact on the economy https://t.co/GeYoPAR5dx https://t.co/UL9mkn…
  • Natural gas: A close below the low end of the zone could send the price towards $2.210. Get your technical analysis from @malkudsi here:https://t.co/ag5AG4lm4p https://t.co/l4yiQjELNs
  • Global (finance/market focused) search interest for the top 3 fundamental themes I've been tracking recently: "recession", "negative rates" and "trade war" https://t.co/2DxifuWFra
  • 💵 $USD Price Outlook - via @DailyFX The latest US Dollar Price Volatility Report discusses firming Fed rate cut expectations and rising liquidity amid ongoing repo market mania. Link to Full Analysis: https://www.dailyfx.com/forex/fundamental/us_dollar_index/usd_trading_today/2019/10/21/us-dollar-price-volatility-report-dovish-fed-bets-firm-liquidity-up.html https://t.co/LMQktoht1J
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: 0.29% 🇳🇿NZD: 0.28% 🇦🇺AUD: 0.16% 🇨🇭CHF: -0.17% 🇪🇺EUR: -0.19% 🇯🇵JPY: -0.19% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/fireEbOHko
  • The #Dow Jones is less than 600 points beneath all-time highs and enjoys nearby technical support. Get your market update from @PeterHanksFX here: https://t.co/jwRttukai5 https://t.co/BRlWozNdN2
  • Retail FX traders have pushed their short $GBPUSD interest to the highest in over a year. I think the contrarian appetite for quick reversal is overpowering the effort to better understand a convoluted Brexit situation... https://t.co/qXdSZSg0AZ
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.15% Silver: 0.12% Gold: -0.41% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/v3vS5HeduS
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.98%, while traders in US 500 are at opposite extremes with 76.54%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/62LQ69JdDM
Fed Rate Bets, Emerging Markets ETF Boost USD. AUD Eyes 2018 Low

Fed Rate Bets, Emerging Markets ETF Boost USD. AUD Eyes 2018 Low

2018-08-23 23:00:00
Daniel Dubrovsky, Analyst
Share:

Asia & Pacific Market Open – Emerging Markets, Fed, S&P 500, USD, AUD, JPY

  • Weakness in stocks as the MSCI Emerging Markets ETF fell and Fed rate hike bets boosted USD
  • Japanese Yen may look past local CPI data for risk trends stemming from Australia, trade wars
  • AUD/USD prices clocked in largest decline in a day in over two months. Eyes 2018 low ahead

Just getting started trading FX? See our beginners’ guide for FX traders to learn how you can apply this in your strategy!

Market mood deteriorated throughout Thrusday’s trading session, sending most global benchmark stocks lower. This picked up pace towards the latter half of the day as the MSCI Emerging Markets ETF (EEM) suffered its largest drop in a single day since August 15thas expected. Worries of US imposing sanctions on South Africa may have contributed to the decline.

The S&P 500 fell about 0.17% after a couple of warning signs on the daily chart hinted that a reversal could be upon us in the near-term. Stock markets were also under pressure from prospects of tightening global credit conditions ahead of a speech from Fed Chair Jerome Powell at the Jackson Hole central banking symposium.

To that end, the US Dollar outperformed against its major peers as some traders sought safety in the global reserve currency. It rose alongside local government bond yields as well. Expectations of a second Fed rate hike by the end of this year grew. Gold prices declined as demand for the fiat-alternative commodity waned. Anti-risk currencies like the Swiss Franc and Japanese Yen rose.

The sentiment-linked Australian and New Zealand Dollars suffered, with the former declining more as political uncertainty weighed against the unit. Australia’s Prime Minister Malcolm Turnbull has been slowly losing grip on his leadership. Yesterday, the ASX 200 suffered as he announced that he would not stand as a candidate in a leadership ballot.

During the early hours of Friday’s Asia/Pacific session, we had some commentary from RBNZ’s Governor Adrian Orr and Canada’s Prime Minister Justin Trudeau. The former noted that the central bank is evenly balanced on the rate outlook while the latter said that he is encouraged by progress on NAFTA. The New Zealand and Canadian Dollars however showed little volatility on both of their speeches.

Ahead, we will get Japanese CPI statistics where headline inflation is expected to pick up to 1.0% y/y in July from 0.7% in June. But this data seems unlikely to materially alter the BoJ’s outlook on monetary policy. Rather, the anti-risk unit will probably focused on risk trends that may be influenced from political updates in Australia or trade war news.

AUD/USD Technical Analysis – Eyeing the 2018 Low

After a temporary pullback in AUD/USDas expected, the pair clocked in its largest fall in a day in over two months. This brought the pair close to the current 2018 low at 0.72026 which is coincidentally closely aligned with the 38.2% Fibonacci extension. A break under support then exposes the December/May 2016 lows. Meanwhile, near-term resistance is the August 21st high around 0.73818.

AUD/USD daily chart

Chart created in TradingView

US Trading Session

Fed Rate Bets, Emerging Markets ETF Boost USD. AUD Eyes 2018 Low

Asia Pacific Trading Session

Fed Rate Bets, Emerging Markets ETF Boost USD. AUD Eyes 2018 Low

** All times listed in GMT. See the full economic calendar here

FX Trading Resources

--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

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

DISCLOSURES

News & Analysis at your fingertips.