KVB Market Analysis | 27 August: AUD/USD Holds Below Seven-Month High Amid Divergent Central Bank Policies
The Australian Dollar (AUD) traded sideways against the US Dollar (USD) on Tuesday, staying just below the seven-month high of 0.6798 reached on Monday. The downside for the AUD/USD pair is expected to be limited due to differing policy outlooks between the Reserve Bank of Australia (RBA) and the US Federal Reserve. The RBA Minutes indicated that a rate cut is unlikely soon, and Governor Michele Bullock affirmed the central bank's readiness to raise rates again if necessary to combat inflation.
Silver Price Breakout Begins as US Treasury Yields Drop to Multi-year Lows
An environment defined by plummeting US Treasury yields and a weak US Dollar has historically been very bullish for silver prices.
US Q2 GDP Preview: Slowest Growth Since 2017
Growth in the second quarter is expected to have slowed to 1.8%, its lowest figure in two years, as continued trade wars weigh on domestic output, providing the Fed signals it needs for rate cuts.
Gold Price Consolidation Sets Stage for Rally to Fresh 2019 Highs
Despite rebounds in higher beta assets and higher yielding currencies alike, gold prices have maintained their elevation. Stability in the face of adversity bodes well for the future.
Gold Prices Maintains Sideways Range Despite Plunge in Gold Volatility
With 2019 Fed rate cut odds at their lowest level since May 30, measures of volatility have dropped, and in turn, lower yielding currencies and safe haven assets have suffered.
EUR Hit Hard as Draghi Hints at Further QE, Key Focus on ECB Sintra Panel
EUR is eyeing its worse trading day in June as Mario Draghi reiterates that further economic stimulus is to be expected if market conditions continue to worsen. EURUSD falls below 1.1200 for the first time since the beginning of the month.
US Dollar Steadies as May FOMC Minutes Detail “Patient” Approach
The May FOMC minutes detailed a reserved conversation among policymakers who believed that patience on rates would be appropriate for the foreseeable future.
