​EBC Markets Briefing | Aussie dollar looks buoyant; Oracle surged nearly 10%

The US dollar nursed steep losses on Tuesday ahead of a slate of economic data that will shape the interest rate path, while the Australian dollar was on a solid footing.

A major Australian pension fund said the Australian dollar has been undervalued as the country's central bank starts to tighten rates while most major economies keep rates on hold or prepare to cut.

Increasing buying to hedge international equities portfolios by pension funds could put upward pressure on the currency, according to analysts. Benchmark government bond yields are the highest in the G10.

The country's Q3 growth missed analysts' expectations, but clocked its fastest expansion in about two years. Big AI investment is set to spur productivity in the economy, according to the RBA.

Iron ore fell below $100 on Monday amid signs of a well-supplied market stack up. Mills in China reduce steel output on an annual basis, while miners in Australia and Brazil boost ore production.

The greenback may have more room to fall, BofA said, as structural challenges — such as a dovish pivot from the Fed and the lagging impact of trade wars — have yet to play out.

The Aussie dollar again failed to push above $0.7100, risking a double-top pattern. We expect it to retest the recent low of $0.7056 in the short term, before challenging the resistance.

Asset recap

As of market close on 9 February, among EBC major products, Oracle shares led gains from analyst upgrade. The renewed focus is on the company's AI partnerships and large scale capital.

Marsh & McLennan reached a 52-week low, though Goldman Sachs has increased its price target for Marsh to $203, maintaining a Neutral rating, citing modest growth in organic growth and operating margins.

Despite halting its record run, banks and asset managers including Deutsche Bank and Goldman Sachs still back gold to recover due to long-term demand drivers including diversification away from the US.

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