Australian Dollar subdues ahead of Tuesday’s RBA rate decision
Monday 2 December, 2019
Daily Currency UpdateAUD - Australian DollarThe Australian Dollar failed to break 68c last week and remained range bound between 67c and 68c vs its US counterpart. Having initially touched 0.6799 on Monday, the AUD/USD witnessed a gradual decline to touch an eventual low of 0.6754 Friday night. Not helping in its fight we had weak local data which saw a report released on Friday by the Housing Industry Association (HIA) said new home sales declined 0.5%, after posting back-to-back gains. Meanwhile, Private Sector Credit grew by 2.5 percent but missed expectations of a 2.8 percent rise, overall the financial aggregates data released by the Reserve Bank of Australia indicated overall credit rose 2.5 per cent in the 12 months to October being the lowest since April 2010.The local unit might be able to look past the US-China trade story for just minute as we see raft of economic data released this week. We start today with the release of AIG Manufacturing Index, MI Inflation Gauge and Building Approvals which are forecasted to drop by 1% in November. Tomorrow is the last RBA monetary policy decision of the year where we are expecting no change to the official cash rate and for it to remain at 0.75%. The AUD/USD opens this morning at 0.6760, we see initial support at 0.6730 followed by 0.6700. The market faces near term resistance at 0.6800 followed by 0.6830.
Key MoversThe US Dollar Index which measures the Greenbacks strength against a basket of six major currencies was steady on Friday in holiday-thinned trade after Thursdays Thanksgiving, the DXY closed the week at 98.28. The GBP/USD inched up and closed the week at 1.2942, for most of November, the pair has been holding above the 23.6% retracement of the October rally at around 1.2820, although below the mentioned high, and needs to break one of those to find directional strength. With the UK election just 10 days away the Conservative Party's lead over Labour has dropped slightly. The Tories have experienced a drop of one point to 46%, while Labour has gained three points to 31%, the Liberal Democrats are up one point to 13%, while the Brexit Party is down one point to 2% according a local UK survey.
- AUD/USD: 0.6700 - 0.6800 ▼
- GBP/AUD: 1.8900 - 1.9200 ▲
- AUD/NZD: 1.0500 - 1.0600 ▼
- AUD/EUR: 0.6100 - 0.6170 ▼
- AUD/CAD: 0.8920 - 0.9000 ▼