Trade negotiations dictate Australian dollar movements
|AUD - Australian Dollar
The Australian Dollar traded slightly higher to start the week, pushing 0.2% into positive territory on Monday. Opening at 0.6873, the local currency capped out at the 69 US cent handle as investors continue to trade on Phase-One of Sino - US trade agreements.
The Mid-Year Economic and Fiscal Outlook (MYEFO) was released yesterday morning where job creation and wage growth is a major focus. Treasury scaled back revenue by $3 billion on the year to $32 billion yet remains on target to show a surplus. GDP growth has also been cut to 2.25% for 12 months through to June 2020.
The Australian dollar opens this morning at 0.6886 ahead of the release of Monetary Policy minutes due at 11:30am AEST. We expect support levels to hold on moves approaching 0.6820, while any upward push will likely meet resistance at 0.6935.
Key Movers
With a number of key Geopolitical events in focus last week, markets took a breather on Monday as investors shift their focus to a packed economic calendar this week. Yesterday saw the release of a number of important Chinese economic data releases including a positive retail and industrial production print.
Equities continued its bullish trend hitting fresh highs globally as safe haven currencies such as the USD and JPY retraced. The S&P 500 and Nasdaq are up both 23% and 28% for the year as sentiment remains positive into the festive period.
Despite the US Dollar Index (DXY) retreating against a basket of currencies by 0.15% on the day, Flash Manufacturing in the US remained in expansion territory with the NAHB Housing Market Index climbing to 20-year highs.
Expected Ranges
AUD/USD: 0.6820 - 0.6935 ▲
GBP/AUD: 1.9200 - 1.9700 ▲
AUD/NZD: 1.0400 - 1.0480 ▲
AUD/EUR: 0.6135 - 0.6215 ▲
AUD/CAD: 0.9000 - 0.9120 ▲
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