Daily Currency Update

Get access to our expert daily market analyses and discover how your currency has been tracking with our exchange rate tools

Aussie consolidates as Trump pours cold water on retaliation in the Middle East

AUD - Australian Dollar

The Australian Dollar enjoyed a day of two halves yesterday as it struggled to arrest the momentum after days of steady decline. Starting the day on the same recent negative trajectory the Aussie extended its declines to hit as low as 0.6848 before modestly bouncing up during the American session after President Trumps speech on the on-going tensions with Iran. Opening this morning at 0.6870, the Aussie nevertheless remains under pressure.

In what proved to be a pivotal day for geo-politics, resulted in a subdued day for FX markets with only marginal declines for the Aussie throughout the day. There was a distinct flight to safety at one point of the day however with risk sentiment deteriorating on the prospect of another conflict in the Middle East. Despite the escalation between the US and Iran, the market turned a corner when President Trump announced that no American citizens were harmed and hinted at no further retaliation. The Aussie bounced significantly on the news to stay level pegging with yesterday mornings’ open.

Closer to home, there was some economic data that shored up the Aussie’s consolidation with Australian Building Permits recording an increase of 11.8% in November. Compared with the previous result of -7.9%, it was a nice recovery. Moving into Thursday Australia will release its November Trade Balance to drive direction domestically with the Aussie also keeping a close eye on the on-going conflict in the Middle East.

Key Movers

Markets remained relatively static throughout Wednesday with little on the economic calendar to drive direction. There was ADP Non-Farm Employment Change in the US that did strengthen the Greenback throughout the day but momentum was primarily dictated by the escalation in the Middle East. Risk assets took a tumble initially as news filtered through from the region with the notable sharp fall in US bond yields leading the way. Nevertheless, President Trump allayed fears of a full-scale escalation which ultimately improved risk sentiment to result in a neutral day for FX markets. Opening this morning at 97.27 on the US Dollar Index, the US Dollar remains a strong performer with an increase of 0.27% for the day.

Expected Ranges

AUD/CAD: 0.8924 - 0.8986 ▼

AUD/EUR: 0.6149 - 0.6222 ▼

GBP/AUD: 1.9023 -1.9103 ▲

AUD/NZD: 1.0296 - 1.0358 ▼

AUD/USD: 0.6831 - 0.6902 ▼