AUD/USD recovers 0.5% to retake 0.71.

Daily Currency Update

The Australian Dollar advanced 0.5% to start the week, opening this morning at 0.7124 despite a stronger Greenback. In what was a dull start to the week on the global economic calendar, the Aussie managed to find some momentum domestically and bounce back from its Friday losses. It was also aided by risk on sentiment from US earnings season. Spearheaded by the likes of Amazon, the Aussie forced its way higher throughout the Monday session. Domestically, the Aussie turned to a few local releases for support. Australia’s TD Securities Inflation rose past 0.2% to 0.4% in January while ANZ Job Advertisements improved to -0.3% versus the amended prior figures of -5.8%. Furthermore, the AiG Performance of Services Index also improved from 49.6 to 56.2. The highlight of the day however was Q4 Retail Sales which reported a record high of 8.2% in Q4 2021, firmly putting the Aussie in Bullish territory. Moving into Tuesday, the Aussie now turns to NAB’s business confidence report for direction.

Key Movers

Wall Street posted modest gains at the opening, but was unable to hold on and dipped in to the red. The Dow Jones index closed flat at 35,091, while the benchmark S&P 500 slid 0.3 per cent to 4,483 and the tech-heavy Nasdaq lost 0.6 per cent to 14,045. Facebook owner Meta Platforms extended its losses, and lost 5 per cent, after its bleak forecast last week caused a record plunge in the social media company’s stock market value. On the commodities Iron ore rose $US2.80 or 1.9 per cent to $US149.40 per tonne. On Tuesday, the US will publish the December Trade Balance and minor optimism indexes. The EUR/USD pair started the week gaping higher, but was unable to retain gains and settled at around 1.1420. On the data front, Germany published December Industrial Production, which fell by 0.3% MoM, missing expectations, while the annual reading printed at -4.1% against the market’s forecast of -2.4%. The Euro is currently trading at 1.1441 against the Greenback. We continue to expect support to hold on moves approaching 1.1415 while now any upward push will likely meet resistance around 1.1480.

Expected Ranges

• AUD/USD: 0.7079 – 0.7163 ▼
• AUD/EUR: 0.6185 – 0.6260 ▼
• GBP/AUD: 1.8887 – 1.9116 ▲
• AUD/NZD: 1.0668 – 1.0798 ▲
• AUD/CAD: 0.8967 – 0.9076 ▼