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Aussie hits fresh June high but fails to hold above 0.7

AUD - Australian Dollar

The Australian Dollar opens 0.36% higher from Friday’s open, opening this morning at 0.6968 after touching fresh June highs of 0.7012 despite a stronger than expected unemployment report out of the US.

Friday started in relatively neutral territory after the Aussie fell back from Thursday’s high of 0.6977 but found its feet later in the day as risk sentiment again turned positive. The Aussie quickly moved past the psychological level of 0.7 but failed to hold onto gains and was quickly sold off during the American trading session when the US Dollar enjoyed a slight reprieve from the heavy selling seen during the week. Driven by US unemployment figures, the Greenback tempered Aussie gains as unemployment came in at 13.3%, a vast improvement on the 19.4% expected.

Nevertheless, the Aussie also finds itself well supported by Chinese Trade Balance data released on Sunday which saw China’s exports in May fall a less-than-expected 3.3% compared with a year earlier. Chinese Imports however were 16.7% down over the same period.

Moving into a new week, the Aussie looks to continue to benefit from the shift in optimistic risk sentiment with relatively positive data points seen in China and the United States. Nevertheless, technicals point to an overbought Aussie and the Australian Dollar is particularly susceptible to deteriorating Sino-American relations.

Key Movers

Friday had a number of large movements but none larger than the shift from safe haven currencies such as the Swiss Franc. The US Dollar enjoyed a 0.75% increase against the Swiss Franc on Friday as global risk sentiment continued to remain positive and drive market activity. Similarly, the USD also appreciated 0.47% against another safe haven currency the Japanese Yen and 0.43% against the Euro. All in all, the relatively positive unemployment figures in the United States support the US Dollar Index to appreciate 0.29% on Friday.

Across the pond in the United Kingdom, the Great British Pound continued its gains against the US Dollar into a seventh day, despite a resurgent Greenback and fresh Brexit concerns. Rising 0.6% against the US Dollar, the market shrugged off Brexit concerns and COVID-19 statistics for the mean time and took the ‘glass half full’ approach.

Expected Ranges

AUD/CAD: 0.9301 - 0.9399 ▲

AUD/EUR: 0.6104 - 0.6215 ▲

GBP/AUD: 1.8141 - 1.8244 ▼

AUD/NZD: 1.0637 - 1.0751 ▲

AUD/USD: 0.6916 - 0.7012 ▲