Marketwatch APAC

Daily Insights
August 2, 2023

The AUDUSD tracked lower after the Reserve Bank of Australia chose to put rates on hold at their meeting yesterday, leaving the Cash Rate at 4.1%. They suggested that recent data was consistent with inflation returning to target and that they are seeing earlier rate hikes work through the economy as demand slows and labour markets loosen up. That said the bank has not ruled out further tightening of policy, which will be data dependent and should inflation require further pressure to return to targets of 2-3%. The AUDUSD has fallen to pressure the 0.66-cent levels and depending on the outcomes of US Non-Farm Payrolls later in the week, could test the yearly lows. Overnight however, lacklustre US data for ISM Manuf PMI  and a notch down by Fitch ratings for the US long-term foreign currency rating to AA from AAA, has softened the US-dollar and lent support back to the falling Aussie. The AUDUSD trend remains sideways between familiar ranges of late, though with a pessimistic RBA , softer China economic data releases and expectations for more positive data out of the US, one would favour another leg lower on the antipodean pairs. A break of 0.66-cents should target 0.6540’s , while consolidation on the flip side will see advances above 0.6670’s alleviate some of the pressure.

Wall Street indices were mixed for the day as the new month opens up as investors look to the next round of economic data for the US and continue to monitors seasonal corporate earnings reports. The DJI gained 0.2%, the S&P500 lost ground by -0.3% and the Nasdaq shed -0.4% for the session. Australian shares are set to open flat with mixed performances on commodities and China demand concerns dampening investor appetite for the local market.

Gold prices dropped by 1% for the day as investors shunned the lustre metal in favour of US-dollars, as they look forward to fresh economic data later this week that could steer the FOMC policy decisions for the next meeting.

Copper prices gave back previous session gains as traders respond to weaker data out of China and Eurozone that suggest softer demand. Dalian Iron Ore prices remained firm for the day, though markets are measuring China’s latest policy guidelines and monitoring oversupply concerns.

Brent Crude Oil prices settled a tad lower as a firmer US-dollar and traders taking recent profits off the table dented market enthusiasm for the opening session of the month.

Economic Calendar

USD - ADP Non-Farm Employment Change

Market Indicators

Currency Pairs
Pair High Low
aud/usd 0.65588 0.65139
nzd/usd 0.60932 0.60602
aud/nzd 1.07698 1.07336
usd/jpy 143.892 142.06
usd/cad 1.33779 1.33339
eur/usd 1.09561 1.09121
gbp/usd 1.2728 1.26182
aud/eur 1.67671 1.66941
aud/jpy 94.084 92.98
Equities and Commodities
S&P 500 4507.28
DOW 35267.8
Nasdaq 100 15378.4
ASX200 7304.8
GOLD 1934.53
WTI 81.07

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.

About Michael Buck


Michael Buck is part of GPS’ trade desk in Perth, Australia. He has worked in foreign exchange specializing in derivatives in London, New York and Australia. He has been both a trader at bank and has developed pricing and risk software solutions.