by Chris Becker
The Australian dollar kept rolling higher yesterday after a substantial bounce off monthly lows last week, buoyed by the potentiality of a definitive outcome in the dragged out US/China trade talks. Indeed, up until the Sydney open this morning, where Pound Sterling spiked on the potential news in a postponement of Brexit, it was the best performing currency against USD:
It was also gaining against Yen and Euro:
But the Kiwi is the bellwether, with stress building, this morning saw a reversal for the Aussie battler against all the crosses and the USD:
It’s hard to deal with a more bearish chart than this one, with Westpac’s recent call for a rate cut for the RBA soon, UBS are also out with a note this morning warning of a late year rate cut, accelerating into 2020 as GDP warnings mount. Traders’ will also be watching Fed Chairman Powell’s testimony over the next two days to get an insight into any further rate rises and diminishing bond yield differentials back home.
The PBOC put the fix in on Yuan again today, moving it down to 6.6952 against USD versus Monday’s print at 6.7131, causing the offshore trading in USDCNH to push further down into new monthly lows:
A bit more window dressing as the US/China trade talks continue?