Aussie dollar jumps ahead of the RBA announcement
Tuesday 4 June, 2019
Daily Currency UpdateAUD - Australian DollarThe Australian dollar is higher this morning when valued against the Greenback, its highest level since May 13 at 0.6982, adding 0.6% on a daily basis. The primary driver overnight being broad-based greenback weakness. On the data front yesterday the Aussie found support at the beginning of the day from an upward surprise from Chinese data, as the Caixin Manufacturing PMI came in at 50.2 in May, better than the 50.0 expected. Looking ahead today and all eyes will be on Australian Retail Sales at 11.30am AEST, forecast up by 0.2% in the month of April, and the Reserve Bank of Australia (RBA) Interest Rate Decision at 2.30pm AEST. The RBA is largely expected to cut rates by 25 basis points to 1.25%, which would be a fresh record low. From a technical perspective, the AUD/USD pair is currently trading at 0.6976. We continue to expect support to hold on moves approaching 0.6940 while now any upward push will likely meet resistance around 0.7000.
Key MoversOn the release front in the US yesterday we saw softer-than-expected US data beginning with ISM Manufacturing PMI for the month of May which resulted at 52.1, well below the 53.0 expected, and the lowest since October 2016 fuelling speculation of a possible rate cut in the US. Following the release St. Louis Federal Reserve President James Bullard said an interest rate cut “may be warranted soon,” given the rising economic risk posed by global trade tensions as well as weak U.S. inflation. Looking ahead tonight and we will see the release of US Final Services PMI and monthly Factory Orders for the month of May. Wrapping up yesterday’s risk events and tensions are still high between the U.S and China with China now threatening to stop exports of rare-earth metals to the U.S. which are used in a wide range of technology products including battery systems, and of which China is the largest exporter.
- AUD/CAD: 0.9270 - 0.9480 ▲
- AUD/EUR: 0.6100 - 0.6300 ▲
- AUD/GBP: 0.5400 - 0.5600 ▲
- AUD/NZD: 1.0450 - 1.0650 ▼
- AUD/USD: 0.6850 - 0.7050 ▲