FX DAILY | 07.05.2019 | Marc-André Fongern

CURRENCY INSIGHTS - 07.05.2019 | MAF Global Forex

RBA - AUDUSD : As expected, near-term rally in absence of a cut as the @RBAInfo needs more evidence of a slowdown. The labour market kept the central bank's hopes alive for the time being. So, now it's up to the ''U.S. vs China'' story to determine the direction for AUD. From a fundamental point of view one could argue the @RBAInfo did the wrong thing but I think clinging to a stronger labour market while expecting acceptable GDP / Inflation data is the right way to leave the door open for possible cuts due to an economic slowdown (trade war). I think the Federal election as well as stronger job numbers skewing the picture a little bit. Fundamentals are still weak, while we can't exclude further downside risks to the economy. The RBA's ''Buying time'' strategy could be a warning to markets.

AUDUSD - Sell on rallies.

Turkey - USDTRY : The combination of incalculable political risks and still dreadful inflation data is a pure horror-story for Lira bulls out there...Watch out, EM FX investors. After Erdogan claimed ''corruption and organised crime'' there is an increasing risk of unrest among Turkish people. Further Lira depreciation expected...The annulment of recent election results could backfire at Erdogan if he fails to prove accusations.

Brexit - GBPUSD : Scepticism regarding cross-party talks is weighing on sterling momentarily. Nobody expects to see much progress as May remains under pressure and in case of an agreement between her and Corbyn we doubt that MPs on both sides would be satisfied.

STAY TUNED...