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Currency Market Analysis

Aug 19, 2019 | Currency Market Analysis

Global Themes

Aussie starts week near highs ahead of RBA, Jackson Hole 

The Australian dollar was lifted on Friday as global sharemarkets continued to reclaim their earlier losses. Across the globe, markets were higher on hopes for further stimulus measures with media reports suggesting the German government was considering increasing debt to boost growth. The US sharemarket, as measured by the Dow Jones index, was up 1.2%, while the German Dax gained 1.3%. After experiencing the worst one-day single point drop on Wednesday, US sharemarkets have calmed – at least for now – and this sees the AUD start the new week on a more positive footing.

Euro weaker

The AUDUSD gained 0.1%. The euro was mostly weaker as markets looked to the potentially devaluing strategy of monetary and fiscal stimulus. The AUDEUR gained 0.3% as it ended at the highest level in three weeks. The AUD was higher in most other markets with only the AUDGBP lower in the majors.

Central banks in focus

We have a big week from the central banks with the main focus on the Jackson Hole Symposium due later this week. Hosted by the Federal Reserve of Kansas City, the event attracts central bankers from around the world.  A shift in commentary from key policymakers can have a big impact on FX markets. This year’s theme is “The Challenges of Monetary Policy”. Otherwise, minutes from the Reserve Bank of Australia, due Tuesday, and from the US Federal Reserve, due Thursday, will keep central banks in focus this week.

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