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Breaking News: US Tax Hike in Effect

[fa icon="calendar"] May 10, 2019 at 3:16 PM / by Fullerton Markets

The US decided to increase its tax rate from 10% to 25%.

  • This move will affect Chinese products.
  • Commodities currency such as Australian dollar and New Zealand dollar could take a hit amidst the uncertainty. Both central banks remained dovish as RBNZ cut rates while RBA has slashed economic growth rate. 

AUD/USD could be heavily impacted by the trade negotiations and monetary policy changes in time to come. With RBA slashing growth forecast, market is pricing in a 25% rate cut in June, perhaps having burnt their May bets. The odds will increase nearer to date and a rate cut seems inevitable. 

AUD/USD could fall towards the 0.6920 which is a Feb 2016 low when market starts to price in a rate cut by RBA.

 

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Topics: Breaking News, 2019


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