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Australian dollar tests 67 US cent support level
AUD - Australian Dollar
The Australian dollar continued its downward path during the domestic trading session yesterday as markets digest the RBA’s decision to cut interest rates on Tuesday to record lows of 0.75%. Opening Wednesday morning at the 67 US cent handle, lows of 0.6670 were tested at the close of play with economists now pricing in a 50% chance of the RBA moving again in November with lingering domestic growth concerns.
Losses for the local currency recovered in overnight movements as equities and the greenback were both lower overnight. The Nasdaq in particular fell 3% with its biggest one day decline in two months. Weaker than expected ADP Non-Farm Employment was the main catalyst for a slide by the worlds most traded currency, aiding the AUD/USD back above the 67 US cent handle on open this morning.
The Australian dollar is currently trading at 0.6706. We expect support levels to hold on moves approaching 0.6670, while any upward push will likely meet resistance at 0.6750.
Key Movers
Weak economic data and a dive in equity prices saw the US dollar come under pressure overnight. All major equity indexes were lower as fears of a recession linger over domestic markets in the United States. A weaker than expected ADP Non-Farm employment print which measures private sector employment created a dovish tone during the North American Session.
The majority of currencies moved in favour against the US Dollar with the Japanese Yen seeing the largest benefit, trading 0.5% higher. The World Trade Organisation approved tariffs by the United States against the European Union creating further global trade war uncertainties. The U.S is set to impose tariffs on $7.5bn worth of goods set to come into force on October 18th.
All eyes will be on the release on the ISM Non-Manufacturing PMI print due for release in the United States overnight as liquidity in the market thins with China observing a week-long holiday.
Expected Ranges
AUD/USD: 0.6670 - 0.6750 ▼GBP/AUD: 1.8200 - 1.8600 ▲
AUD/NZD: 1.0650 - 1.0750 ▼
AUD/EUR: 0.6100 - 0.6150 ▼
AUD/CAD: 0.8875 - 0.8900 ▲