Aussie to remain in offered mode ?

The Australian dollar caught a bit of a tailwind heading into this morning’s private sector credit and the Purchaser’s Price Inflation  Index releases,  coming off session lows below .7450  as the market pared back some overnight shorts. But with the overhang from Trump uncertainty weighing on investor sentiment, it remains unlikely the market will take a significant position in either direction more so as next week could offer some challenges for “ yield appeal”  with the FOMC on tap.With so much priced out of Fed policy this year, the only real surprise in my view would be a more hawkish lean from the Fed than the market expects.

Australian Q 1  Producer Price Index came in .5% vs .5% expected and year on year 1.3% vs .7 % prior .Private sector credit contracted .3 vs .5 % expected .But with national data taking a back seat to the bigger global picture while focusing on next week’s RBA response to their concerns about the labour markets, we should expect the Aussie to remain in offer mode over the near term.

Waiting in the weeds for regional risk sentiment is how  Chinese authorities extend their attempt to tame the China Money Ball and avoid a credit bubble explosion.  Overnight the Shanghai interbank overnight rate was nudged to 2.792 % culling liquidity in the interbank markets in their challenge to deleverage an overheated economy

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes