Listen to the latest market mood for the AUDJPY pair.
Weak AUD, Strong JPY
Markets are firmly back to a risk-off footing on two factors.
-
Firstly, the Fed was downbeat in its assessment of the US economy. Fed’s Powell discussed forward guidance and reviewed Yield Curve Control but stated its effectiveness was still an ‘open question’. Fed’s Powell was downbeat on US jobs stating that despite May’s upbeat NFP reading it could be years until people find jobs again. Oil plunged more than 4%, antipodean (AUD, NZD) currencies were down, and copper prices fell.
-
Secondly, the second wave of virus fears hit the markets as Texas reports its highest one day count of new COVID-19 cases and California’s hospitalisations are at their highest.
So, in this risk-off environment expect the high beta AUD to lose value and the safe-haven JPY to attract bids. Therefore expect AUDJPY sellers on pullbacks today.
We expect this outlook to play out over the next 6-10 hours through to New York close and as long as these trade conditions remain.
Main Trade Risks
The main trade risk is if there is some positive news that changes the risk tone. This could be positive COVID-19 news or any very positive Us-China trade news.
Our products and commentary provides general advice that do not take into account your personal objectives, financial situation or needs. The content of this website must not be construed as personal advice.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.