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Morning Brief 21.03.2017

21 March 2017

U.S dollar is lower against emerging market currencies today as Federal Reserve signaled more dovish than expected monetary policy which sent the investor on higher profit assets.

U.S dollar is down 0.4 against Mexican peso which is the lowest level since U.S presidential elections in November. U.S dollar also fell 0.7% against SA Rand which is lowest since August 2015. Other currencies including Brazilian Real, Indian Rupee and Korean won also trading higher against the dollar.

U.S dollar is also under pressure due to concerns regarding the U.S trade policy could damage the growth. World leaders failed to find common grounds at the G20 meeting. G20 meeting press release shows that the U>S can use barriers/sanction or other policy tools to barred the trade from its trade partner and thwart the economic policies which it believes to be unfair.

In Australia, official index of Australian capital city house prices rose 4.1% in fourth quarter versus the expected 2.5%. Sydney and Melbourne house prices jumped 5.2% and 5.3 respectively.  Still some analysts think there will be broad slow down of prices due to mortgage rate hikes by commercial banks, more strict regulation for bank lending and fading credit growth will be preventing a sustained acceleration in prices.

According to ANZ index consumer confidence in Australia fell in third straight week. Consumer confidence index down 1% and it is at 112, lowest value since April 2016. The weakness in confidence was driven by households concerns about both current and future economic conditions.

Australian and New Zealand banking group is expecting stabilize dairy product prices after a poor Global dairy auction two weeks ago. While NZX dairy futures indicate more pressure on milk powder prices. ANZ thinks the decrease in milk prices is limited. As it is expected that improving conditions in New Zealand will bring greater milk supply later in the year, which will be acting as a brake on prices.