Market Watch AU – 9th February 2024
The US-dollar gained today as data for unemployment claims came in lower than expected for the week and once again reinforces how resilient the labor market has been and underpins the Fed message that interest rates will remain higher for longer. As this has been one of the key drivers for the AUDUSD over the past couple of years, the pair has eased lower below 0.65-cents across the day, as the USD strengthened. On trading floors the AUDUSD found support at the 0.6480 level, which has been an a key for traders as a daily bearish signal. Ultimately it will be the continuing moves on the US-dollar and its reaction to interest rate trajectory expectations, that steers the Aussie, though at the same time the notion of a global economy shrinking has investors concerned over commodity currencies. For today locally, we look ahead to RBA Bullock’s Testimony for further clues on the Central Banks’s outlook, though not expected to be a market mover. The AUDUSD should find initial support at 0.6470/80 zone, with a more important 0.6470 behind and resistance to continue at 0.6535/50 area on any strength.
Wall Street stock indices were little changed for the day, however a tad lower as investors continue to welcome quarterly earnings reports and monitoring economic data releases for possible US interest rate cuts. The DJI was down -0.02%, the S&P500 lower by -0.04%, and the Nasdaq gaining +0.2% over the session. Australian shares are set to open softer, weighed down by gold miners and as investors review comments from US Fed policy makers on their expectations for policy path.
Gold prices lost ground for the day as the US-dollar strengthened, with better US Treasury yields, on the diminishing hopes for an early rate cut from the Fed.
Copper prices returned small gains for the day with an upbeat sentiment from Chinese equities. Dalian Iron ore futures also traded firmer yesterday on hopes for further support measures from Chinese authorities to curtail their struggling economy.
Brent Crude prices strengthened again, after the US imposed sanctions on suppliers of Russian crude and Israel rejects a ceasefire offer from Hamas.
Open today 0.6492
Yesterday’s Range 0.6481 / 0.6532
Open today 0.6097
Yesterday’s Range 0.6079 / 0.6124
Yesterday’s Range 1.0647 / 1.0678
Yesterday’s Range 0.6020 / 0.6058
Yesterday’s Range 4.6780 / 4.7085
Yesterday’s Range 0.5141 / 0.5169
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