Home Daily Commentaries AUD gives up 0.69 again as commodities come under pressure

AUD gives up 0.69 again as commodities come under pressure

Daily Currency Update

The Australian dollar opens this morning having drifted back below 0.69 US cents amid improved US macroeconomic indicators and an uptick in US treasury yields. With little on hand to drive direction through the domestic session the AUD tracked sideways, bouncing between 0.6880 and 0.6910. Having crept toward intraday highs at 0.6950 in the early part of the overnight session the AUD then fell steadily into the open, giving up gains and breaking supports at 0.6880 and 0.6860. Risk appetite wavered after US jobs data showed robust growth in employment opportunities through July while consumer confidence printed 5 points higher, reversing a downturn in June and July and marking its highest level since May. The upbeat macro data set coupled with more hawkish Fed rhetoric helped elevate US treasury yields and the Dollar. With the AUD under pressure reports Taiwan had fired warning shots at a Chinese drone served to further dampen demand for risk and the AUD marked intraday lows at 0.6850.  Our attentions turn now to a heavy macro set with Chinese PMI data, Euro area CPI, Canadian GDP and US ADP employment data headlining the ticket.

Key Movers

The Euro outperformed major counterparts through trade on Tuesday as a further depreciation in gas prices and hawkish ECB helped support the embattled shared currency and foster a break back above parity. European Gas Futures fell 7% marking a near 30% depreciation this week and forcing the benchmark Dutch futures rate back to 253 Euro per megawatt hour. While Gazprom will shut down supply to Germany through its Nordstream pipeline market nerves have eased as gas storage sites show reasonable reserves and regulatory interventions to control the flow into consumer energy prices are expected. The Euro moved above parity marking intraday highs at 1.0050. In contract, the Great British pound continued to track lower as the rising risk of recession and an unprecedented surge in inflation pressures weigh on the currency. Having tumbled below 1.17 the GBP touched intraday lows at 1.1625 before consolidating nearer 1.1650 leading into this morning’s open. With inflation projected to hit 18% before January, the embattled currency will likely face sustained headwinds as we move toward and through Q4. Our attentions today turn to a host of macro data sets with Euro CPI inflation and US labour market date headlining the ticket.

Expected Ranges

  • AUD/USD: 0.6780 - 0.6980 ▼
  • AUD/EUR: 0.6780 - 0.6930 ▼
  • GBP/AUD: 1.6820 - 1.7120 ▲
  • AUD/NZD: 1.1080 - 1.1250 ▼
  • AUD/CAD: 0.8950 - 0.9020 ▲