Australian Dollar struggles with 69c vs the Greenback
Thursday 7 November, 2019
Daily Currency UpdateAUD - Australian DollarIn the absence of any top tier local data on Wednesday AUD/USD moves were limited moving within a tight range of 0.6886 and 0.6900. The pair unable to break the 69c resistance level with offshore markets driving the Australian Dollar lower touching 0.6869 on the back of better than expected US labor force data and trade optimism. Investors are waiting for further details about the potential signing of the US-Sino trade deal, with Australia being one of China’s largest trading partners the deal could have an impact on the Aussie. Looking ahead, the domestic docket sees the release of AIG Construction Index, September showed a further contraction with the index dropping to 42.6. Investors are braced for another reading in negative territory. We will also have trade balance due where the surplus narrowed for a second straight month, falling to A$5.93 billion in August. This was down sharply from the July release of A$8.04 billion. The downturn is expected to continue in September, with an estimate of A$5.10 billion.From a technical perspective, the Aussie is currently trading at 0.6882. We continue to expect support to hold on moves approaching 0.6820 followed by 0.6800. While any upward push will likely meet resistance at 0.6900 and 0.6930.
Key MoversMarkets have been quite uneventful in the last 24 hours, we saw data out the U.S on Wednesday showed Labor Costs for the third quarter increased 3.6 percent beating market expectations of 2.2 percent. Also, the latest on the US-China trade deal was that they were still working together to potentially sign a “phase one” trade deal as early as this month. The U.S Dollar index has strengthened and currently trades around 97.95.The UK election campaign has officially began as Boris Johnson visited Buckingham Place to notify the Queen of the parliament’s dissolution ahead of a Conservative Party rally. Financial markets now see opinion polls as the main barometer to watch in terms of gauging Brexit outcomes which means any major swings in polls could impact on Sterling. The latest opinion poll shows Boris Johnson’s Conservatives in a comfortable 11 point lead on 38 percent ahead of the December 12 general election, labour lagging on 27 percent, the Brexit party seeing their vote shrink to only 10%, whilst the Liberal Democrats are on 16 percent. GBP/USD sits at 1.2856 having dropped from a high of 1.2897. The main event for the Pound this week has been the highly anticipated Bank of England meeting today, it is not expected that they will announce a change in policy but there is growing speculation that they will begin to adopt a more neutral stance due to weaker growth.
- AUD/USD: 0.6800 - 0.6930 ▲
- GBP/AUD: 1.8550 - 1.8800 ▼
- AUD/NZD: 1.0740 - 1.0880 ▲
- AUD/EUR: 0.6160 - 0.6240 ▲
- AUD/CAD: 0.9040 - 0.9130 ▲