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Aussie dollar shrugs off RBA dovish tone

AUD - Australian Dollar

Yesterday we saw the Aussie dollar pull back against the greenback after the Reserve Bank of Australia (RBA) meeting Minutes showed that most policymakers expect inflation to remain mute for some time and confirming speculation that an upcoming rate cut is around the corner. The AUD/USD pair reached a low of 0.7139.

Looking ahead today and all eyes will be on Chinese economic data which begins with the release of Q1 GDP. Chinese growth is foreseen up by 6.3% YoY in the first three months of the year, worse than the previous 6.4% from the previous quarter. We will also see the release of March Retail Sales, seen rising by 8.4% YoY, and Industrial Production for the same period, seen up by 5.9% vs. the previous 5.3%.

From a technical perspective, the AUD/USD pair is currently trading at 0.7176. We continue to expect support to hold on moves approaching 0.7130 while now any upward push will likely meet resistance around 0.7200.

Key Movers

US data released overnight was mixed. US home builder sentiment rose to a 6-month high in April rising one point to 63. Sentiment levels have held in the low 60s for the past three months. We also saw the release of US Industrial production which was on the softer side (contracted 0.1% in March) amidst weaker global economic conditions. Looking ahead tonight the US will publish its February Trade Balance, and Mortgage Applications for last week.

Expected Ranges

AUD/CAD: 0.9480 - 0.9680 ▲

AUD/EUR: 0.6250 - 0.6450 ▲

AUD/GBP: 0.5400 - 0.5600 ▲

AUD/NZD: 1.0500 - 1.0700 ▲

AUD/USD: 0.7100 - 0.7200 ▲