Home Daily Commentaries Aussie dollar holding above the 69 US cents

Aussie dollar holding above the 69 US cents

Tuesday 26 July, 2022

Daily Currency Update

The Australian dollar is slightly stronger this morning trading just above 69 US cents. The AUD/USD pair advanced within range on Monday, approaching the July high set on Friday at 0.6977. Despite posting limited gains, the positive tone of equities was enough to support the Australian dollar. From a technical perspective, the AUD/USD pair is currently trading at 0.6951. We should see support around 0.6930 and any resistance likely to be around 0.6975.

There were no data releases yesterday.  The economic calendar remains light today. At 11.30am the Australian Bureau of Statistics will release quarterly Consumer Price Index (CPI). Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.  On Thursday we will see the release of monthly Retail Sales figures which is the earliest look at vital consumer spending data. On Friday we will see the release of the Producer Price Index (PPI) a leading indicator of consumer inflation.

Key Movers

Overnight the US published the June Chicago Fed National Activity Index, which contracted by more than anticipated to -0.19 and the July Dallas Fed Manufacturing Business Index, which fell from -17.7 to -22.6, indicating slowing economic activity. Wall Street managed to close mixed, with Nasdaq posting mild losses versus the softer gains of the DJI30 and S&P 500. However, the US 10-year Treasury yields snapped a three-day downtrend and rose nearly 1.75% while regaining the 2.81% mark of late. Looking ahead this week and it is stacked full of potential market-moving events including the US Fed’s policy meeting, US GDP and employment cost index data, euro area CPI and GDP data and earnings reports from big tech companies.

Expected Ranges

  • AUD/USD: 0.6850 - 0.7050 ▲
  • AUD/EUR: 0.6700 - 0.6900 ▲
  • GBP/AUD: 1.7200 - 1.7400 ▼
  • AUD/NZD: 1.1000 - 1.1200 ▲
  • AUD/CAD: 0.8850 - 0.9050 ▲