Daily currency update

The Australian dollar is steady this morning when valued against the Greenback trading just above US 0.69c. The AUD/USD pair was slightly down 0.3% due to falling Iron Ore prices, which declined from $131.45 to $129.71 a ton, and currently trading at 0.6921. A relatively quiet economic calendar this week suggests that equity sentiment could be pivotal in determining whether AUD/USD can remain clear of May’s lows around 0.6830. On the data front there were no scheduled releases yesterday. Looking ahead this week and on Wednesday we will see the release of May’s retail sales numbers. A strong retail beat will boost the case for another aggressive move by the RBA in July after their outsized 50bps hike. On a technical level this week the short-term outlook for the Australian dollar has improved. The next resistance level is at 0.6990. Whereas a decline back under 0.6925 would expose the weekly low around 0.6870.

Key movers

Overnight US equities showed signs of consolidation after the 6.5% surge last week. It was a quiet day on Wall Street with one trader describing conditions as “sleepy”. The S&P500 has been hovering in and out of positive territory and is currently down slightly. Overnight the S&P 500 slipped 0.3 per cent after shifting between small gains and losses throughout the day. The Dow Jones slipped 0.2 per cent and the Nasdaq fell 0.7 per cent. The US Dollar Index, a gauge of the greenback’s value against a basket of its rivals, gave up some territory on Monday, down 0.32%, back under the 104.000 mark. Contrarily, the US 10-year Treasury yield grinds higher by close to four basis points and sits at 3.162%. Looking ahead this week In the US attention will likely continue to be on how the Federal Reserve evaluates the current outlook between high inflation and recession fears. Regarding data, the Personal Consumption Expenditures (PCE report) on Thursday will be the most important followed by the ISM Manufacturing on Friday which is a leading indicator of economic health. On Wednesday Federal Reserve Chair Jerome Powell will speak as he attends the ECB Forum on Central Banking.

Expected ranges

  • AUD/USD: 0.6800 – 0.7000 ▼
  • AUD/EUR: 0.6450 – 0.6650 ▼
  • GBP/AUD: 1.7600 – 1.7800 ▼
  • AUD/NZD: 1.0850 – 1.1050 ▲
  • AUD/CAD: 0.8800 – 0.9000 ▲

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