​EBC Markets Briefing | Trade war hammers Aussie; gold sets fresh peak

The Australian dollar slipped on Thursday as the Sino-US trade war sapped investor sentiment, while growing confidence of the Fed cutting its policy interest rate this year also weighed on the greenback.

Australia's unemployment rate spiked unexpectedly to a near four-year high in September as more people went looking for work, a weak result that revived hopes for more policy easing.

Traders ramped up bets for a rate cut from the RBA in November to 72%. Prospects for more easing had faded as policymakers fret about sticky inflation and a rebound in consumer spending.

The country's goods trade surplus experienced a significant contraction in August, well short of market expectations. Gold set to become the second-biggest resource earner after iron ore this financial year.

Adding to headwinds, China's real estate market is expected to fall more sharply than expected in 2025, extending an industry slump for a fifth-straight year, S&P Global Ratings said in a report last week.

Higher US tariffs have so far had a smaller impact globally than expected, but it would be "premature and incorrect" to conclude they have had no effect on economic growth, according to the IMF.

The Australian dollar peaked around 0.67 in late September, before tumbling below 50 SMA. The downtrend is likely to continue, but 200 SMA is expected to stem the potential decline.

Asset recap

As of market close on 15 October, among EBC products, Morgan Stanley and VanEck Junior Gold Miners ETFs led gains. Bank stocks continued to surprise positively in their Q3 earnings reports.

Morgan Stanley's earnings beat expectations by the largest margin in nearly five years on booming equities trading, investment banking and wealth management results.

Gold surged past $4,200 per ounce to reach a new all-time high, propelling shares in junior gold mining companies higher. Fed Chair Powell's latest remarks suggested two further interest rate cuts may occur by year-end.

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