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Aussie dollar weaker ahead of Business Confidence Survey

AUD - Australian Dollar

A quiet day locally yesterday celebrating the Queen's Birthday (except for Queensland and Western Australia). The Aussie dollar pulled back against the Greenback, losing around 0.6%, reaching a daily low of 0.6956 after the release of Chinese trade data which revealed a much larger than expected fall in imports. Stronger Chinese export data was dismissed by the market as reflecting front-loading by exporters before higher US tariffs come into effect. Looking ahead today and we will see the release of the National Australia Bank (NAB) Business Confidence survey at 11.30am AEST which has remained unchanged at zero for past two months. Business Confidence survey is a leading indicator of economic health and any result above 0 indicates improving conditions. Looking ahead for the rest of the week and all attentions will turn to Thursday’s Employment data release with forecast for the unemployment rate to fall from 5.2% to 5.1%, a 16k increase expected.

From a technical perspective, the AUD/USD pair is currently trading at 0.6959. We continue to expect support to hold on moves approaching 0.6930 while now any upward push will likely meet resistance around 0.7020.

Key Movers

The Greenback gained on Monday against its major counterparts after the United States and Mexico reached a deal to avoid any tariffs. It has been a ‘risk-on’ start to the week for global markets after U.S. President Donald Trump announcement over the weekend that he would “’indefinitely suspend” tariffs on Mexico and threatening to impose a 5% import tariffs on all Mexican goods starting on Monday if Mexico did not commit to do more to tighten its borders.

The British Pound was among the worst performers on Monday against the Greenback, falling to 1.2650, following the release of disappointing UK data. The British Pound fell 0.4% after weaker than expected Gross Domestic Product contracted monthly basis in April by 0.4% and Industrial Production in the same month decreased by 1.0% vs. an expected 0.4% advance. We also saw the release of UK Manufacturing Production which declined by 0.8% against the 1.3% market's forecast. From a technical perspective, the GBP/USD pair is currently trading at 1.2687. We continue to expect support to hold on moves approaching 1.2650 while now any upward push will likely meet resistance around 1.2760.

Expected Ranges

AUD/CAD: 0.9130 - 0.9330 ▼

AUD/EUR: 0.6040 - 0.6250 ▼

AUD/GBP: 0.5380 - 0.5590 ▼

AUD/NZD: 0.6500 - 0.6700 ▼

AUD/USD: 0.6850 - 0.7020 ▼