Daily Currency Update

The Australian dollar opens this morning at much the same point as yesterday, having failed to hold onto overnight gains and a brief foray above 0.73 US cents. The AUD tracked sideways through much of the local session bouncing between 0.7275 and 0.7290, before surging through 0.73 shortly after the domestic sessions close. Despite key data points supporting an aggressive path to US central bank policy normalisation, markets appear to be unwinding recent USD short positions. With much of the policy change already priced in and the roadmap of tighter financial conditions clearer, investors are looking for an out and opportunity to capitalise on recent upside. Having touched intraday highs at 0.7315, the AUD drifted back below 0.73 and now buys 0.7280 US cents. With little of note on the domestic ticket, our attentions turn to US Retail Sales data and a slate of second tier data points for direction into the weekly close.

Key Movers

The US dollar came under added downward pressure through trade on Thursday as investors continued to capitalise on recent gains, jumping on profit taking opportunities. With key risk events now behind us and little changed in the roadmap to monetary policy normalisation, markets have moved off the world’s base currency having priced in positive data points. The DXY dollar index fell through 95, marking intraday lows at 94.66 before edging marginally higher into the daily close. The euro has been a primary beneficiary of this weeks USD correction, pushing back above 1.1450 and closing in on resistance at 1.1480/1.15, while the Great British pound held onto gains above 1.37 and the yen pushed the dollar toward supports at 114. Attentions turn now to US retail sales and second tier macroeconomic data for direction into the weekend. A DXY close below yesterday’s low could signal a technical shift in momentum. We are keenly attuned to market action into the close.

Expected Ranges

  • AUD/USD: 0.7170 – 0.7330 ▲
  • AUD/EUR: 0.6320 – 0.6380 ▼
  • GBP/AUD: 1.8690 – 1.8920 ▼
  • AUD/NZD: 1.0580 – 1.06560 ▼
  • AUD/CAD: 0.9080 – 0.9130 ▲

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