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Aussie weaker on Risk, RBA
AUD - Australian Dollar
Last week saw the Australian Dollar fall approximately 3.5% against its US counterpart. Having started the week around the 0.73 handle, we now see AUD/USD trading closer to 0.70 as we head into this week. Although the NZD also fell over 3%, AUD/NZD fell nearly 0.5% throughout the week and is now trading below the key 1.08 handle.
Although a lot of the move can be attributed to weaker risk sentiment and broad-based USD strength, the Australian Dollar was seemingly weighed down by rising expectations that the Reserve Bank of Australia will ease monetary policy further at the next meeting.
The data docket is light to start out the week with not much to move markets. We will see Chinese manufacturing data later on in the week as well as the key US non-farm payrolls read on Friday which will both be watched closely. Downside AUD/USD momentum could see supports at 0.70 tested this week.
Key Movers
The US Dollar index eked out a two-month high on Friday as broad based USD strength was embraced by markets. With the index rising 0.3% on the day, USD/EUR fell to a two-month low of 1.1612, USD/JPY rose to 105.70 and as we touched on above, the AUD and NZD were also lower.
In Trump-Land, the president put forward Coney Barrett as his nomination for the supreme court however given this was widely expected, market reaction is expected to be muted as markets open. There was also further comment regarding the long-awaited fiscal stimulus package in the US with House Speaker Pelosi indicating that a deal was a ‘good chance’ of being agreed.
Expected Ranges
AUD/USD: 0.6980 - 0.7090 ▼AUD/EUR: 0.6000 - 0.6110 ▼
GBP/AUD: 1.8000– 1.8200 ▲
AUD/NZD: 1.0700 - 1.0850 ▼
AUD/CAD: 0.9380 - 0.9495 ▼