Home Daily Commentaries Aussie slides to two-week lows ahead of labour force data

Aussie slides to two-week lows ahead of labour force data

Daily Currency Update

AUD - Australian DollarThe Australian dollar weakened intraday on Wednesday dipping to a low of 0.6943 during the Asian session following data released by Westpac. Australian Westpac Consumer Sentiment dipped in June by 0.6% following gains from the previous two months. This was a surprise to most especially after the RBA cut rates last week, which suggests there are deepening concerns about the economy that have outweighed the initial boost from lower interest rates. The Aussie didn’t have much luck at regaining those losses and continued to be dragged lower in the North American session buying as low as 0.6926 vs the Greenback. With investors squarely focused this week on trade risks and risk sentiment Aussie rallies are likely to be capped. The recent intensification of the global trade war carries negative implications for Australia. AUD demand should reduce as the trade balance declines via both lower commodity prices and global demand. The AUD is not cheap and currency depreciation is an effective way to quickly establish necessary discount for these investors.Looking ahead, today sees the release of labour force data with May employment expected to rise by 16k and see the unemployment rate drift a little lower to 5.1%.

Key Movers

The focus was on US consumer inflation yesterday, CPI was weaker than expected at both the core and headline levels. CPI slowed to 0.1%, down from 0.3% in the previous release, this matched the estimate. The core reading posted a gain of 0.1% for a fourth straight month, shy of the forecast of 0.2%. This data reinforces the case among investors for the Fed to cut interest rates. EUR/USD slipped on Trumps threats of sanctions on Germany’s planned gas pipeline form Russia, the pair dropped from 1.3435 down to 1.1282.

Expected Ranges

  • AUD/USD: 0.6880 - 0.7020 ▼
  • AUD/EUR: 0.6100 - 0.6190 ▼
  • AUD/NZD: 1.0480 - 1.0580 ▼
  • AUD/CAD: 0.9200 - 0.9310 ▲
  • AUD/GBP: 0.5420 - 0.5500 ▼