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Declines for the Australian dollar continue to linger

AUD - Australian Dollar

The Australian dollar continued its bias lower during the Asian session yesterday as Sino-US trade uncertainties pushed traders towards a bias into safe haven currency plays. The Australian dollar moved from open of 0.6753 to intraday lows of 0.6735 at the close of Wednesday.

The release of construction figures did no favours for the local currency as a slowdown was seen in the construction sector by 3.8% over the three months to June. With construction declining the overall effect for the economy could mean a hit to GDP levels next week and weakness in the local labour market.

This morning sees the release of Private Capital Expenditure with on-going trade wars and global economic slowdown likely to put delays on large spending in the new capital space. The Australian Dollar is currently trading at 0.6736. We continue to expect support to hold on moves approaching 0.6680 while now any upward push will likely meet resistance at 68 US cents.

Key Movers

The Great British Pound was rattled overnight as UK Prime Minister Boris Johnson made the announcement that he was suspending parliament for a month in the lead up to Brexit finality on the 31st October. Opposition was outraged as it limits the ability to derail any Brexit plans the PM may have as the shutdown needed to be approved by Queen Elizabeth II. The result for the Sterling was an immediate move downwards from 1.2285 to intraday lows of 1.2150.

The US Dollar was the main benefactor of the decline in the British Pound overnight as the US Dollar Index (DXY) climbed to overnight highs of 98.26 and up 0.2% on the day. The US Trade representative office confirmed overnight that the additional 5% tariff on a list of $300bn Chinese imports is to start on September 1st and December 15th. In an interview with Bloomberg, US Treasury Secretary Steve Mnuchin has ruled out any intervention at this point in time to the current strength of the US Dollar.

This evening markets focus on Prelim GDP results in the United States for the 2nd quarter of 2019. Economists expect a slight revise down to 2% from its previous reading of 2.1%

Expected Ranges

AUD/USD: 0.6700 - 0.6780 ▼

GBP/AUD: 1.7900 - 1.8300 ▼

AUD/NZD: 1.0600 - 1.0700 ▲

AUD/EUR: 0.6040 - 0.6100 ▼

AUD/CAD: 0.8900 - 0.9000 ▼