Today’s Key Market Drivers: 24th August 2018
“Who will it be?”
The Aussie Dollar continues to struggle under the weight of political uncertainty as the Liberal Party will today vote for the second time this week on who will lead the country.
Yesterday I posted a video on the TrainwithAndrew social media channels saying that in the short term the Aussie Dollar was likely going to come under some selling pressure, however, once the leader is decided investment banks and hedge funds will turn their attention to what they usually focus on and that is the RBA’s views and direction on monetary policy and the economy.
Political instability does not send a currency higher or lower over the long haul, this role is decided by monetary policy delivered by Central Banks. I do suspect that if Julie Bishop gets the votes today (she’s my tip) and becomes the first Liberal female Prime Minister the Aussie Dollar could jump back higher in the short-term. Long-term I continue to remain bearish on the AUD v USD and am always eager to look for shorting opportunities on the local currency with the interest rate differential between the US Fed and RBA continuing to widen.
The US Dollar was a stand out winner on Thursday as traders took profits on long Euro v US Dollar positions and wait for Jerome Powell to speak on Friday at the Jackson Hole Central Bankers conference. The US Fed Chairman will speak on Friday and it is expected that he will once again confirm the Federal Reserve sees the US economy strong enough to withstand two more interest rate increases before the end of 2018. This news is already priced into the US Dollar so if the US Dollar is going to shift sharply higher or lower then Powell’s speech will need to deviate from the market’s expectation.
As we head into Friday we have two high impacting news numbers due. Japanese CPI which would need to be out of line with market estimates for it to move the Yen. The market expects 1% inflation growth year on year and the inflation needle rarely moves on this number so I don’t expect any bangs when the data is released. US Durable Goods sales (products that last more than 3 years) is set for release in the US trading session and has the potential to move the US Dollar 25 to 50 ticks on release.
Any trade updates throughout the day will be sent via Trade Time. You can also follow my daily updates on Facebook, Twitter, Instagram by searching for TrainwithAndrew. Make sure you subscribe to the Andrew Barnett YouTube channel after watching today’s Sunrise video below.
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
If you would like to speak to one of our Senior Client Advisors regarding the relative client opportunities offered at LTG GoldRock and how you can follow along with our Professional traders each day in our live trading room please contact us today or you can register for one of our a live coaching and trading webinars by clicking here.