AUD - Australian Dollar

Upbeat sentiment on Thursday saw the Australian dollar rise from 0.7380 to 0.7412. With expectations that the US federal reserve may be slower to tighten monetary policy settings in the US and US economic data surprising to the downside, the USD was broadly lower. This also allowed the New Zealand dollar to rise from 0.6970 to 0.7020 throughout trade, pushing the AUD/NZD cross rate lower to 1.0546.

We saw US Q2 GDP come in at an annualised 6.5% quarter on quarter growth, well below consensus estimates of 8.5%. Also out of the US, jobless claims came in close to expectations and pending home sales fell 1.9% in June, with prices at record highs.

The day ahead features Australian private credit data and Q2 PPI. We will have NZ consumer confidence data from ANZ, before we turn to Q2 GDP and CPI out of Europe. There’s also a raft of releases due from the US, with the June core PCE deflator the headline risk event. Traders will be looking for AUD/USD to consolidate above 0.7400 before any further upside moves are considered.

Key Movers

The US dollar continues to come under selling pressure since yesterday's FOMC meeting. With the market seemingly coming to the conclusion that the Federal Reserve won’t be announcing any tapering in bond purchases until at least later this year. The USD index is now trading at a one month low and is 0.4% lower as positive risk sentiment and a fall in US real yields weigh further on the worlds reserve currency.

Expected Ranges

AUD/USD: 0.7300 - 0.7450 ▲

AUD/EUR: 0.6180 - 0.6250 ▼

GBP/AUD: 1.8730– 1.9000 ▲

AUD/NZD: 1.0500- 1.0600 ▼

AUD/CAD: 0.9100 - 0.9280 ▼

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