Aussie under pressure

Daily Analysis - 07/02/2019

The Reserve Bank of Australia: possible rate cut

On Thursday the AUD settled near a 14- day low, while investors anticipated that interest rates are probably going to be lower this year due to rising growth risks globally.

On Wednesday Australia's central bank indicated a potential rate cut while it supported the increasing economic dangers. Meanwhile, an extraordinary change from its long-standing tightening preference to a more dovish bias sent the local currency AUD sliding.

In early trade, the Aussie dollar was at $0.7100, giving back about 1.8% in the previous session, its biggest percentage drop in more than a year.

Gold falls to a 7-days low

On Thursday, the popular yellow metal Gold dropped to a week low pressed by a powerful dollar. Concerns on the other hand regarding the diminishing global economic growth and fears of another U.S. government shutdown kept the safe-haven metal above the important level of $ 1,300. U.S. gold futures fell about 0.5% at $1,307.29 while the Spot gold dropped 0.2% to $1,303.64 per ounce. Gold Prices dropped more than 0.5% in the previous trading session in their largest single-day drop since last month.

GBP was higher

GBP was higher at $1.2929. The British pound has declined by 1.3% in February due to Brexit fears. The United Kingdom is going to leave the European Union on March 29 while the BOE is programmed to meet later today and is generally suspected to keep interest rates stable. Kathy Lien, the managing director of currency strategy at BK Asset Management said "The BoE won't even consider changing interest rates until the terms to leaving the EU to become clear," and added "BoE Governor Mark Carney will reiterate his warning about the risks of a disorderly Brexit and reassure investors that they are ready to increase stimulus if it causes a major disruption in the markets”.

US Stocks slipped on Wednesday

On Wednesday Stocks fell while Wall Street absorbed mixed quarterly profits results. All these as President Donald Trump's second State of the Union address was in effect. The S&P 500 dropped more than 0.2% to 2,731.60, giving back the five-day winning streak. The Nasdaq Composite sank more than 0.3% to about 7,375.25. Tech-related stock companies like Netflix, Facebook, Alphabet and Amazon, all failed at least 0.3%.

The Dow Jones Industrial Average finished about 21.20 points lower at 25,390.29.