Home Daily Commentaries Aussie range bound ahead of tomorrow’s RBA rate decision

Aussie range bound ahead of tomorrow’s RBA rate decision

Daily Currency Update

AUD - Australian DollarThe Australian Dollar remained range bound last week against the Greenback and opens relatively unchanged this morning around the 0.6760 price zone. The Aussie did see a slight benefit on Friday night touching a high of 0.6779 following more bad news on the US-China trade war front where it was reported the Trump administration were discussing ways to limit US investors portfolio flows into China, the move would have repercussions for billions of dollars in investment pegged to major indexes. The move was short-lived relinquishing all gains before Friday’s New York close. Looking ahead, locally we have a raft of macroeconomic releases due this week, kicking off today with MI Inflation Gauge and Private Sector Credit. The main event will be the RBA monetary policy meeting tomorrow where markets are pricing in a 25bps cut to 0.75%, the lowest on record. Also worth noting, Australia's largest trading partner China is set to release the official Manufacturing PMI for September, expected at 49.7 and the Non-Manufacturing PMI, seen at 54.2. The Caixin Manufacturing Index for the same month will also be out, seen at 50.2 from a previous 50.4. From a technical perspective, the Aussie is currently trading at 0.6763. We continue to expect support to hold on moves approaching 0.6735 followed by 0.6700 while any upward push will likely meet resistance at 0.6770 and 0.6805.

Key Movers

The US Dollar Index hit a new high for the year on Friday touching 99.31 against a basket of major currencies before it witnessed a pullback following the release of Consumer Spending and Durable Goods. Consumer spending rose a small 0.1% last month while goods orders a tiny 0.2%. The number suggests the US economy is cooling from a strong second quarter. Over in the UK, GBP/USD closed the week with a downfall at 1.2284 with likely weakness to continue this week as the Prime Minister has been accused of working for the interest of hedge funds and is also facing a police investigation over alleged favours to an American businesswomen. The EUR/USD touched a near multi-year low of 1.0904 on Friday and local data didn’t do too much to help’s it cause, Import Prices fell sharply in Germany in August, while the EU Economic Sentiment Indicator fell to 101.7 in September, much worse than the 103.00 anticipated.

Expected Ranges

  • AUD/USD: 0.6680 - 0.6850 ▼
  • GBP/AUD: 1.7900 - 1.8400 ▼
  • AUD/NZD: 1.0710 - 1.0790 ▲
  • AUD/EUR: 0.6120 - 0.6240 ▼
  • AUD/CAD: 0.8900 - 0.9000 ▼