The Australian dollar moved lower through trade on Monday, continuing Friday’s downward correction and slipping back below 0.72 US cents. The AUD failed to capitalise on an uptick in equities throughout Asian trade as concerns surrounding Brexit, Italian budget woes and jitters across tech stocks dampened risk appetite. With US investors enjoying an extended weekend in observance of Veteran’s day trading was thin across the North American session, compounding volatility and perhaps exacerbating haven plays.
The AUD has suffered a sharp correction through the last two trading sessions, giving up almost 100 points to trade a full cent lower on open this morning. With the midterms now behind us attentions have again turned to US/China Trade and the burgeoning gap in yields and monetary policy. While a broader risk off tone has helped foster demand for the worlds base currency investors appear reluctant to extend AUD upside, selling into the recent rally.
Attentions now turn to a docket dominated by headline data events. NAB business confidence will drive direction through trade today while Wednesday quarterly wage price index will be crucial in determining tightening labour market conditions and a possible uptick in consumer lead growth. An upside surprise could help foster a move back toward 0.73 as deflationary pressures ease.