FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
97,246,429Confirmed
2,080,659Deaths
69,791,796Recovered
Fetching Location Data…
Advertisement
Advertisement
James Hyerczyk
AUD/USD

A drop in U.S. Treasury yields perhaps due to safe haven buying related to renewed geopolitical tensions over North Korea may be providing support for the Australian Dollar on Wednesday.

At 1200 GMT, the AUD/USD is trading .7483, up 0.0012 or +0.16%.

Advertisement
Know where the Market is headed? Take advantage now with 

75% of retail CFD investors lose money

Daily AUD/USD

Late Tuesday, North Korea cancelled high-level talks with Seoul, denouncing military exercises between South Korea and the United States, which may have thrown into question next month’s unprecedented summit between Kim Jong Un and U.S. President Donald Trump. This news may be making investors nervous, sending them into safe haven assets like the Japanese Yen and U.S. Treasurys. It’s a developing story, but something that should be watched.

Early Tuesday, the U.S. Dollar firmed enough to trade near a five-month high, helped by gains in long-term U.S. Treasury yields. The dollar rally stalled last week after weaker-than-expected April U.S. inflation data was lifted on Tuesday when strong U.S. retail sales sent 10-year Treasury yields surging to a seven-year peak of 3.095 percent.

On Wednesday, the Australian Dollar is also recovering from early session weakness, as traders responded to a disappointing first-quarter wages report and its implications for the Aussie interest rate outlook.

Australian wages grew by 0.5% during the first quarter, below the 0.6% consensus estimate, while the annual pace of wage growth remained steady at 2.1%. This was unchanged from the downwardly revised 0.5% growth seen in the final quarter of last year.

Forecast

Shortly after the U.S. opening, investors seem to be showing little reaction to the weak wages data. This could be because of position-squaring ahead of tomorrow’s reports on Employment Change and the Unemployment Rate. However, it is more likely a reaction to the drop in Treasury yields.

Later today, investors will have a chance to react to a slew of economic data including Building Permits, Housing Starts, Capacity Utilization, Industrial Production and Mortgage Delinquencies. Stronger-than-expected data will increasing the chances of a third rate hike by the Fed.

Building Permits will be closely watched. They are expected to come in at 1.35 million, unchanged from the previous month. A lower than expected number will indicate the impact of rising mortgage rates on the housing market. This will be a sign the economy may be cooling. This could pressure interest rates that could be supportive for the AUD/USD.

Advertisement
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US