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Australian dollar rebounds as risk appetite improves

AUD - Australian Dollar

The Australian dollar continued its push towards 68 US cents overnight as risk appetite improved across global markets. Opening at 0.6756, the local currency was positive in its movements following GDP figures coming in on expectations with the economy expanding 0.5% for the June quarter. Intraday highs touched 68 US cents despite the annualised GDP figure of 1.4% dipping to the worst annual growth since 2009.

With recent indicators for the domestic economy mixed, investors will next look to the release of Trade Balance figures for the month of July this morning with the potential for the Aussie to have a bid at breaking through the 68 US cent barrier for the first time in four weeks.

Global markets will turn its attention to ADP Non-Farm Employment change figures due for release this evening. The Australian Dollar is currently trading at 0.6794. We continue to expect support to hold on moves approaching 0.6750 while now any upward push will likely meet resistance at 0.6840.

Key Movers

It has been quite the evening for the British Pound overnight as the GBP/USD pair dipped below 1.2000 for the first time in nearly three years. The opening of UK Parliament this week has media outlets in overdrive as members of parliament voted for a new law to force Prime Minister Boris Johnson and government to delay a no-deal exit from the EU.

The motion was pass by 327 to 299 as Prime Minister put forth another motion for a snap general election on October 15th which was also rejected. The outcome for the Sterling was positive as it rallied sharply to an overnight high of 1.2250.

The US Dollar remained under selling pressure with the US Dollar Index falling from 2019 highs of 99.37 to 98.40 overnight as a poor ISM manufacturing did no favours for the world’s largest traded currency. Early this morning the United States beige book was released to market suggested the economy was expanding at a modest pace to the end of August. A number of key indicators are due for release this evening including ISM Non-Manufacturing PMI data and Unemployment claims.

Expected Ranges

AUD/USD: 0.6750 - 0.6840 ▲

GBP/AUD: 1.7700 - 1.8300 ▲

AUD/NZD: 1.0650 - 1.0720 ▲

AUD/EUR: 0.6120 - 0.6200 ▼

AUD/CAD: 0.8950 - 0.9050 ▼