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Aussie dollar fails to consolidate above 0.70 US cents

AUD - Australian Dollar

The Australian dollar is weaker this morning when valued against the Greenback. The Aussie dollar reached a high yesterday of 0.7012 but was unable to hold above the 0.70 cents level. Labour market figures released by the Australian Bureau of Statistics on Thursday, showed the country’s unemployment rate had risen to 7.4 per cent for the month of June. The highest it’s been since 1988. Again, it has been younger workers that have been hit particularly hard, as youth unemployment soars to 16.4%. Young males, in particular, with 17.1% out of work. The participation rate remains around 2% below its pre-COVID level, suggesting that there are still a large number of people that have lost their job and are not yet actively seeking work.

On the data front yesterday there were encouraging signs in China, as the Q2 GDP resulted at 11.5%, beating the expected 9.6%, while Industrial Production in the country rose in June by 4.8% YoY. Only Retail Sales were down, which in the same period declined by 1.8%. Looking ahead today there are no scheduled releases in Australia. In the United States tonight we will see the release of monthly Building Permits and Housing Starts. From a technical perspective, the AUD/USD pair is currently trading at 0.6968. We continue to expect support to hold on moves approaching 0.6940, while now any upward push will likely meet resistance around 0.7025.

Key Movers

The safe-haven U.S. dollar rose on Thursday afternoon as worries about rising numbers of coronavirus infections spurred a broader risk-off move, pushing U.S. equities lower. The U.S. dollar index which measures the currency against a basket of six rivals, was up for the session 0.35% at 96.350. On the data front yesterday in the United States, Retail Sales figures jumped 7.5% in the month of June, beating the market’s expectations. Although the resurgence in new COVID-19 cases is chipping at the recovery, keeping 32 million Americans on unemployment benefits. The Philadelphia Fed Manufacturing Survey came in at 24.1 in July, better than the 20 expected. Initial Jobless Claims for the week ended July 10 were a miss, surging to 1.3 million, although Continuing Jobless Claims improved by more than anticipated, printing at 17.338 million in the week ending July 3.

Expected Ranges

AUD/USD: 0.6850 - 0.7050 ▼

AUD/EUR: 0.6080 - 0.6180 ▼

GBP/AUD: 1.7900 - 1.8100 ▲

AUD/NZD: 1.0600 - 1.0700 ▲

AUD/CAD: 0.9400 - 0.9500 ▲