AUD slightly weaker against the greenback

OzForex Research OzForex Foreign Exchange

AUD - Australian Dollar

The Australian dollar fell to a low of 0.7112 on Friday on the back of risk-aversion the Aussie dollar has been under pressure against the greenback ever since topping at 0.7550 on October 29 earlier this year. Last week we saw a surprise came from retail sales which came in better than expected at 4.9% in the month of October, as a result of the economic reopening. Australia is moving forward into its national reopening plan, as over 86% of the population aged 16 or more has been fully vaccinated.

Looking ahead to this week and it's quite a busy week ahead. On Monday we will see the release of quarterly Company Gross Operating Profits which is seen as a leading indicator of economic health, looking at current market conditions, an early signal of future economic activity such as spending, hiring, and investment. On Wednesday we will see the release of Q3 Gross Domestic Product, forecast for 0.5% QoQ, down from 0.7% in the previous quarter. On Thursday we will see the release of trade balance and housing figures throughout the week. From a technical perspective, the AUD/USD pair is currently trading at 0.7130. We continue to expect support to hold on to moves approaching 0.7106 while now any upward push will likely meet resistance around 0.7153.

Key Movers

Financial markets are suffering from the announcement of the new COVID-19 variant Omicron, as health officials suspect it could evade the immune response provided by previous contagions or the vaccines. Over the weekend the new Omicron COVID-19 cases have emerged across Europe, with the UK, the Netherlands and Germany all recording new incidences. We have already seen the UK Government report a third case of the Omicron variant this morning. Germany has also confirmed a third case of the variant, that the case was recorded in the central state of Hesse, while the previous two were in Munich. Two returned travellers have tested positive for the new Omicron variant after arriving in Sydney over the weekend. We anticipate the market to remain volatile until more information is known about the variant and particularly how effective the current crop of vaccines is against it.

Expected Ranges

AUD/USD: 0.7050 - 0.7250 ▼

AUD/EUR: 0.6200 - 0.6400 ▼

GBP/AUD: 1.8550– 1.8750 ▲

AUD/NZD: 1.0330 - 1.0530 ▲

AUD/CAD: 0.9000 - 0.9200 ▼

Author

OzForex Research

OzForex Foreign Exchange

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