AUD, Gold, Oil, Equities sharply higher overnight
17 April 2008
The EUR-USD vaulted to a lifetime peak against the USD on the back of record Euro zone inflation and weak US data (US Home Starts & Building permits plunged, and the Beige Book showed worse than expected economic conditions in the US districts surveyed). In addition:
- AUD-USD rallying to 0.9400 (from around 0.9280 yesterday)
- Gold rallied over USD$20 per ounce to USD$948
- Oil established a new record high of USD$115.07 per barrel
- Base metals and commodity prices in general also moved higher
There is a contrasting view between US and euro zone growth, inflation, and interest rate outlook. The markets expect the US FOMC will have to cut rates by another 0.50% (to 1.75%) at its next rate setting meeting at the end of April.
The AUD-USD is around 4 week highs, and just over a cent away from 24-year highs. Expectations are that the market will remain volatile in both directions.