Australian dollar continues to slide

OzForex Research OzForex Foreign Exchange

AUD - Australian Dollar

On Friday the Australian dollar fell to a multi-year low of 0.6585 before bouncing back above 0.6600 to close the session. The Australian dollar is down nearly 6.0 per cent since the start of the year and hitting decade lows against its US counterpart. Economists said the Aussie could fall even lower, particularly if the coronavirus took a long time to contain and China's economy was shut down for an extended period.

The AUD/USD pair fell sharply on Friday after the release of the Australian Commonwealth Bank Services PMI fell to 48.4 in February, while the Commonwealth Bank Manufacturing PMI climbed to 49.8 in the same month, according to preliminary estimates. Looking ahead today and there are no scheduled releases in Australia although China will see the release of January Industrial Production and Retail Sales. If Chinese data does not meet market expectations the AUD/USD pair could well fall to fresh multi-year lows.

From a technical perspective, the AUD/USD pair is currently trading at 0.6598. We continue to expect support to hold on moves approaching 0.6570 while now any upward push will likely meet resistance around 0.6650.

Key Movers

The Greenback fell across the board on Friday, with the various USD indices down in the order of 0.4-0.6%, after a survey of purchasing managers showed U.S. business activity in the manufacturing and services sectors stalled in February and as investors fretted over the fast-spreading coronavirus. Services output contracted to 49.4. The Composite PMI fell to 49.6, in contraction territory for the first time since October 2013. Manufacturing PMI came in at 50.8 the lowest since August. In the US tonight we will see the release of the Chicago Fed National Activity Index and the Dallas Fed Manufacturing Business Index.

Expected Ranges

AUD/USD: 0.6450 - 0.6650 ▼

GBP/AUD: 1.9550 - 1.9750 ▲

AUD/NZD: 1.0350 - 1.0550 ▼

AUD/EUR: 0.6000 - 0.6200 ▼

AUD/CAD: 0.8650 - 0.8850 ▼

Author

OzForex Research

OzForex Foreign Exchange

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