Australian Dollar Outlook - April 6, 2016

Bell FX Currency Outlook: The Australian Dollar is trading lower this morning, falling back towards USD0.7500 overnight.

Australia: Despite a lack of economic data overnight, the AUD has been one of the worst performers, falling to a low of USD0.7510. Yesterday, the RBA keep Australia’s official cash rate unchanged at 2.0% as widely expected. It didn’t really express that much concern about the latest rise in the currency in its post meeting statement and this saw the AUD rise from around USD0.7575 to USD0.7625. It did place an emphasis on upcoming inflation data to help it gauge the outlook for inflation perhaps implying that there was a somewhat great willingness to cut rates in response to lower than expected inflation than previously forecasted. This sentiment weighed on the AUD and its post RBA gains were quickly erased. There is no major data being released in Australia today.

Majors: Concerns over global growth was the main theme in the market overnight. This saw the USD fall to its lowest level in nearly a year against the JPY. Investors are unnerved by the drop in oil prices and weaker equity markets in Asia, Europe and the US and this is leading them to seek shelter in traditional safe-haven assets such as gold and the JPY. The Dow Jones fell 134 points or 0.8% while the S&P 500 fell 1%. Stocks in Japan dropped sharply with bank stocks plunging amid worries about the fallout from negative interest rates introduced in January. The FTSE 100 lost1.2% while the DAX fell 2.6%. Coming up the March FOMC meeting minutes are the main highlight.

Economic Calendar 06 APR

• JN Leading Index CI
• AU RBA’s Kent speaks in Hobart: Economic Forecasting at the Reserve Bank of Australia
• US Fed’s Mester speaks in Cleveland
• US Fed releases Minutes from March 15 FOMC meeting

Bell Fx

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