Daily Currency Update

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Australian Dollar opens the week steady above 67 US cents

AUD - Australian Dollar

The Australian dollar regained its recent foothold in the 67-cent region after opening the week with uncertainty as global risks continually hamper the local currency. Gaining 0.6% for the week, the AUD/USD finished at 0.6712 at Fridays New York close following the release of stable United States Retail numbers for the month of January.

Investors continued to keep a close watch on coronavirus news as global growth outlooks look to be reshaped in the short to medium term. News of a reduction in reported outbreaks over the weekend for the third straight day hopes to improve risk appetite for commodity-based currencies into the new week.

It is a busy week domestically for macroeconomic data with Monetary Policy Meeting Minutes set for release on Tuesday, followed by Wage Price Index and Employment figures scheduled mid-week. The Australian dollar opens steady this morning at 0.6722. We expect support levels to hold on moves approaching 0.6680, while any upward push will likely meet resistance at 0.6750.

Key Movers

The US Dollar continued its march higher in line with equities for 2020 as the US Dollar Index (DXY) reached its highest level since October on Friday evening at 99.17. With the attraction of safe haven flights in play and upbeat local data highlighted by bullish consumer sentiment on Friday, the world largest traded currency could test 2019 highs of 99.67 over the coming week. Consumer spending in the United States rose modestly or the first month of 2020 as retail sales posted numbers of 0.3% in line with expectations.

The single currency in Europe saw further falls last week, hitting two-year lows of 1.0829 against the US Dollar and four-month lows at the Japanese Yen. Continuing to set a bearish tone in the markets, weak economic data and political instability in Germany is likely to weigh on the Euro in the short term.

Global Markets are set to see a drop in liquidity to start the week as the United States observes President day.

Expected Ranges

AUD/USD: 0.6680 - 0.6750 ▼

GBP/AUD: 1.9220 - 1.9750 ▲

AUD/NZD: 1.0400 - 1.0500 ▲

AUD/EUR: 0.6150 - 0.6220 ▲

AUD/CAD: 0.8860 - 0.8950 ▼