The Australian Dollar remains relatively unchanged in overnight trading opening this morning at 0.7388 against the Greenback. The Pair spent most of the day consolidating around yesterday’s open with only a few intra-day movements in either direction. Again, the Aussie touched, and failed to hold, above the 0.74 resistance level.
Market conditions eased throughout most of the day as the United States enjoyed their fourth of July holiday and Australia savoured a quiet domestic calendar. Nevertheless, Traders did have some events to chew on with a US trade representative confirming that 25% tariffs on $34b worth of Chinese goods are expected to take effect at midday in Washington with another $16b worth of goods slated for later this month. China has vowed to retaliate in kind which the market has mostly factored in to their valuations. Traders however stand poised to adjust their valuations as the rhetoric continues to suggest that more trade tensions may be coming.
Closer to home, the Aussie looks to the AIG Construction Index for insight domestically. Later in the day, attentions turn to the on-going tariff implementation which is of key interest to Australian based traders. Widely considered an imperfect proxy for China, the Australia Dollar stands to enter a volatile period should tariffs be implemented.