Aussie struggles to extend beyond 0.69 cents after RBA holds rates
Wednesday 6 November, 2019
Daily Currency UpdateThe Australian dollar gained ground in early Tuesday trading, after the Reserve Bank of Australia (RBA) left the official interest rate at the historic low of 0.75%. The Aussie dollar rallied to a daily high of 0.6927 before settling below 0.6900. The RBA decision to hold rates was largely expected given a marginal improvement in unemployment and a modest uptick in inflation. The future market now forecasting a less than 10 per cent chance of a cut and no longer has a full 25 basis point cut priced in over its 18-month forecast. The Australian currency was also boosted by increasing optimism on a US-China trade deal might be reached by both countries, underpinning the Greenback and pressuring safe-haven currencies.
There’re no macroeconomic releases scheduled in Australia for this Wednesday. From a technical perspective, the AUD/USD pair is currently trading at 0.6894. We continue to expect support to hold on moves approaching 0.6840 while now any upward push will likely meet resistance around 0.6900.
Key MoversThe U.S. dollar rose against the yen on Tuesday thanks to growing optimism the United States and China are on the verge of reaching a preliminary agreement to scale back their bruising trade war. The USD/JPY pair regained the 109.00 level during yesterday trade, approaching the critical 109.30 resistance area. The greenback got an additional boost from the US ISM Non-Manufacturing Index, which beat expectations by printing 54.7 in October, much better than the 53.5 expected and the 52.6 previous. Looking ahead today and the US calendar will be quite light only releasing weekly MBA Mortgage Applications and a speech from Chicago Federal Reserve President Charles Evans. From a technical perspective, the USD/JPY pair is currently trading at 109.18. We continue to expect support to hold on moves approaching 109.00 while now any upward push will likely meet resistance around 109.30.
- AUD/USD: 0.6800 - 0.7000 ▲
- GBP/AUD: 1.8600 - 1.8800 ▼
- AUD/NZD: 1.0700 - 1.0900 ▲
- AUD/EUR: 0.6100 - 0.6300 ▲
- AUD/CAD: 0.9000 - 0.9200 ▲