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Aussie falls 0.56% after NAB Business Confidence Survey points to worsening conditions

AUD - Australian Dollar

The Australian dollar unwound much of its recent gains yesterday as NAB's business confidence survey undermined some of the positivity in the Australia economy. Opening this morning at 0.6928, the Aussie fell 0.56% over a 24 hour period as news of the poor result filtered through the market. The June business confidence result points to a business sector that has lost significant momentum over the last 12 months and suggests a pickup in Q2 is rather unlikely with forward orders being well below average. Ultimately, the concerns from the business sector had a material effect on the Aussie as the negativity surrounding the Australian economy continues to bite.

Moving into Wednesday the Aussie enjoys a quiet day on the domestic economic calendar with little to digest. All eyes however remain on the Federal Reserve as the market trades in a holding pattern ahead of Fed Chair Powell’s semi-annual testimony to congress.

Key Movers

The Great British pound fell to its lowest level since April 2017 overnight, reaching 1.2440 amidst growing concerns. Starting the day on a relatively flat trajectory the Sterling plummeted swiftly after the BRC's retail sales reported an annual drop of 1.6%. Widely expected to be a reading of 0%, the BRC used words like 'bleak' to describe the retail landscape and adding a pall on an already under-siege Great British pound. Adding fuel to the fire was last weeks PMI readings for June which showed a stagnation in the second quarter as well as fresh no-deal Brexit concerns as Boris Johnson tightens his grasp on the Prime Ministership race.

Across the Atlantic, the US Dollar Index (DXY) was also a strong performer ahead of Fed Chair Powell’s testimony tonight in front of Congress. The DXY drifted 0.12% higher and has now strung together 5 consecutive sessions of gains to trade at 97.5 against a basket of currencies.

Expected Ranges

AUD/CAD: 0.9041 - 0.9137 ▼

AUD/EUR: 0.6147 - 0.6213 ▼

GBP/AUD: 1.7941 - 1.8022 ▼

AUD/NZD: 1.0434 - 1.0536 ▼

AUD/USD: 0.6895 - 0.6975 ▼