AUD/USD creeps higher as risk narrative keeps USD on the backfoot

Daily currency update

The Australian dollar extended its run toward US$0.68 through trade on Thursday, buoyed by a sustained improvement in risk appetite and a broadly weaker US dollar. With little of note on the domestic macroeconomic ticket the AUD tracked between US$0.6730 and US$0.6760 through much of the local session, testing resistance on moves above US$0.6750 before extending toward intraday highs just shy of US$0.6780 overnight. With US markets closed for Thanksgiving trading conditions remained thin, offering little support to a USD already under pressure. The FOMC meeting minutes afforded little new insight into future Fed policy, but were seen to have adopted a dovish undertone adding further support to the AUD and heaping more pressure on the USD. Having failed to extend beyond resistance at US$0.6780 the AUD has tracked lower into this morning’s open buying US$0.6765 at time of writing. We anticipate the AUD will continue to track between US$0.65 and US$0.68 as market position themselves for next weeks all important US non-farm payroll print.

Key movers

The US dollar retreated through trade on Thursday, struggling under the weight of the week’s risk-on narrative and a further decline across US rates. With US markets closed for Thanksgiving trading volume was thin and US treasuries continue to point downward adding to the 14 basis point fall seen through Monday, Tuesday and Wednesday. With the US under pressure the euro pushed back above €1.04, while the GBP extended its upturn marking a new 3-month high at £1.2150 before edging lower into this morning’s open. Against a backdrop of lower rates the JPY enjoyed sustained support as the USD consolidated a break below ¥140, marking session lows below ¥138.25. With little of note on today’s ticket our attentions remain with the risk narrative for direction into the weekly close. Having come under sustained pressure through the last 2-3 weeks we anticipate a period of consolidation ahead of key risk events through early December.

Expected ranges

• AUD/USD: 0.6600 – 0.6820 ▲
• AUD/EUR: 0.6420 – 0.6520 ▲
• GBP/AUD: 1.7720 – 1.8020 ▲
• AUD/NZD: 1.0750 – 1.0850 ▲
• AUD/CAD: 0.8980 – 0.9050 ▲