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Aussie dollar steady on trade fears

AUD - Australian Dollar

The Australian dollar is stronger this morning when valued against the Greenback. The AUD/USD recovered from a daily low of 0.6689 to close the day with gains at 0.6775, having reached a fresh 3-day high on the back of further signs that Beijing is not willing to let the yuan weaken rapidly in response to the escalation in trade tensions with the United States. The Australian dollar is likely to remain under pressure from the continued slide in the Chinese yuan.

There were no macroeconomic releases in Australia yesterday. Looking ahead today and the only event scheduled is a speech from Reserve Bank of Australia’s Deputy Governor Dr Guy Debelle.

From a technical perspective, the AUD/USD pair is currently trading at 0.6775. We continue to expect support to hold on moves approaching 0.6735 while now any upward push will likely meet resistance around 0.6790.

Key Movers

Overnight the main headline again was the continued trade war between the United States and China. China announced it would retaliate with tariffs on $75b of US imports, followed by US President Donald Trump announcing that he would add an additional 5% tariff on all $550b Chinese imports. On the back of the announcement the equity markets fell and the Greenback was down 0.4% to 0.5%. Trump also announced the US would increase tariffs on the existing $250b of Chinese imports from 25% to 30% from October 1st.

Expected Ranges

AUD/USD: 0.6725 - 0.6825 ▲

GBP/AUD: 1.7940 - 1.8140 ▼

AUD/NZD: 1.0500 - 1.0700 ▲

AUD/EUR: 0.6000 - 0.6200 ▲

AUD/CAD: 0.8925 - 0.9025 ▼