Aussie dollar slips on weak Chinese data
Tuesday 2 July, 2019
Daily Currency UpdateAUD - Australian DollarThe Australian dollar is weaker this morning when valued against the greenback. After reaching a 24 hour high of 0.7031 the Australian dollar fell for the first time in nine sessions to a low of 69.42 US cents on the back of poor Chinese data, while the greenback appreciated on positive US macroeconomic figures. China released the Caixin Manufacturing PMI which fell more than anticipated, down to 49.4 from 50.2 in May, also below the 50.0 expected. China is Australia's No.1 trading partner and the biggest buyer of the country's iron ore and coal, meaning a slowdown would augur poorly for Australia's already struggling economy. Looking ahead today and the Reserve Bank of Australia (RBA) will have a monetary policy meeting at 2.30pm AEST. The RBA is widely expected to reduce its cash rate to a new all-time low of 1.0 per cent. Rates could dip as low as 0.75 per cent by the middle of next year. From a technical perspective, the AUD/USD pair is currently trading at 0.6965. We continue to expect support to hold on moves approaching 0.6930 while now any upward push will likely meet resistance around 0.6990.
Key MoversThe Greenback is the biggest winner at the beginning of the week, ending Monday with substantial gains against most of its major rivals following news that the United States and China have resumed trade talks after the leaders of both economies met within the G-20 Summit. The United States and China agreed on Saturday to restart trade talks after U.S. President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei in order to reduce tensions with Beijing. On the data front the US ISM manufacturing survey fell to its lowest level since late 2016, at 51.7, although it still managed to beat market expectations. There are no scheduled releases today in the United States. The Pound Sterling is weaker this morning when valued against the Greenback on the back of weaker than expected data release. The initial fall was triggered by the June Markit Manufacturing PMI with the index declining for a third consecutive month to 48.0, its lowest level since February 2013. Looking ahead today all attention will be on the UK Markit Construction PMI for June, foreseen at 49.2 vs. The previous 48.6. From a technical perspective, the GBP/USD pair is currently trading at 1.2645. We continue to expect support to hold on moves approaching 1.2665 while now any upward push will likely meet resistance around 1.2725.
- AUD/USD: 0.6850 - 0.7050 ▼
- GBP/AUD: 1.8050 - 1.8250 ▲
- AUD/NZD: 1.0350 - 1.0550 ▼
- AUD/EUR: 0.6050 - 0.6250 ▲
- AUD/CAD: 0.9050 - 0.9250 ▼