Daily Currency Update

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Aussie range bound ahead of key domestic economic markers

AUD - Australian Dollar

The Australian dollar remained largely range bound through trade on Tuesday bouncing between short term support and resistance handles. With little headline data available through the start of the week the AUD shifted between intraday lows at 0.6830 and session highs just shy of 0.6860 as investors appeared reluctant to extend moves ahead of key data announcements through the back half of the week.

The AUD shifted toward the lower end of ranges following comments from President Trump, wherein, the US Head of State doused recent trade optimism promising to raise Chinese Tariffs if a trade deal cannot be finalised soon while promising to extend taxes on exports to the US to other key trading partners that have “mistreated the US”. Markets appetite for risk waned in the wake of the President's comments yet analysts refrained from extending AUD downside ahead of key data events through Wednesday and Thursday. Attentions now shift to today’s quarterly wage price print and tomorrow’s employment data. Labour market performance is a key marker governing RBA monetary policy decision making and the board will be keenly attuned to fluctuations in labour market growth and wage changes in formulating a plan leading into the last policy meeting of the year. With most investors forecasting the RBA will waylay additional rate cuts into February 2020 a stable print across both data sets will ensure the AUD remains range bound with markets looking for an upside surprise before extending moves back toward and through 0.69. A miss will likely see resistance at 0.6830 and 0.68 tested.

Key Movers

The US edged marginally higher through overnight trade supported by a shift in risk demand as US president Trump doubled down on recent aggressive trade rhetoric. His comments forced a small shift toward haven assets with much of the market immune to his boastful soundbites. Instead attentions turn to tonight CPI inflation print and Friday’s retail sales read for further direction.

The GBP shifted lower through trade on Tuesday, edging lower against both the EURO and USD as the gloss that followed the Brexit Parties decision to not contest key conservative seats at the upcoming election bolstered hopes a majority government will be formed and a no deal Brexit avoided. While Monday’s announcement eases some of the uncertainty there are still significant headwinds ahead for sterling and we anticipate it will continue to fluctuate as headline news hits the wires.

Expected Ranges

AUD/CAD: 0.8970 - 0.9125 ▲

AUD/EUR: 0.6150 - 0.6330 ▲

GBP/AUD: 1.8565 - 1.9050 ▲

AUD/NZD: 1.0735 - 1.0890 ▲

AUD/USD: 0.6755 - 0.6935 ▼