Home Daily Commentaries Aussie dollar trades below 69 US cents

Aussie dollar trades below 69 US cents

Monday 20 February, 2023

Daily Currency Update

The Australian dollar is slightly weaker this morning when valued against the Greenback. The Australian dollar finished the week on a lower note, after hitting a daily high of 0.6884. The AUD/USD pair remains under heavy selling pressure for the third successive day and drops to its lowest level since January 6 heading into the North American session on Friday. At the time of writing, the AUD/USD exchanges hands at 0.6859. Spot prices seem poised to weaken further below the 0.6800 round-figure mark and accelerate the fall toward the next relevant support near the 0.6740-0.6735 region. This is followed by the 100-day SMA, currently around the 0.6715-0.6710 zone, which if broken decisively should set the stage for a further near-term depreciating move for the AUD/USD pair. Looking ahead this week and on Monday there are no scheduled releases. On Tuesday we will see the release of the Purchasing Managers' Index (PMI) a survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. We will also see the release of the Reserve Bank of Australia (RBA) Monetary Policy Meeting Minutes. A detailed record of the RBA Reserve Bank Board's most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates. On Wednesday the Australian Bureau of Statistics will release the quarterly Wage Price Index which is a leading indicator of consumer inflation, when businesses pay more for labor the higher costs are usually passed on to the consumer.

Key Movers

The key headlines on Friday in the UK the GBP/USD is staging a recovery after diving to fresh February lows around 1.1914 in the mid-North American session, bolstered by overall US Dollar (USD) weakness. The UK Retail Sales arrived at 0.5% over the month in January vs. -0.3% expected and -1.2% previous. The Core Retail Sales, stripping the auto motor fuel sales, rose by 0.4% MoM vs. 0% expected and -1.4% previous. On an annualized basis, the UK Retail Sales tumbled 5.1% in January versus -5.5% expected and -6.1% prior while the Core Retail Sales slumped 5.3% in the reported month versus -5.3% expectations and -6.5% previous. Data from both sides of the Atlantic kept the GBP/USD pressured, which finally dropped below the 200-day EMA. A UK inflation report on Tuesday contributed to speculations that the Bank of England (BoE) would not hike rates as aggressively as expected. That, alongside softer than expected Consumer Price Index (CPI) for January in the US, which exceeded estimates by bank analysts, incremented the likelihood of further tightening by the US Federal Reserve (Fed). On the downside, GBP/USD could stretch lower toward 1.1900 (psychological level) and 1.1850 (static level) once 1.1930 support fails. The GBP/USD pair is slightly higher this morning currently trading at 1.2008.

Expected Ranges

  • AUD/USD: 0.6750 - 0.6950 ▼
  • AUD/EUR: 0.6300 - 0.6500 ▼
  • GBP/AUD: 1.7350 - 1.7550 ▲
  • AUD/NZD: 1.0850 - 1.1050 ▲
  • AUD/CAD: 0.9150 - 0.9350 ▼