Daily Currency Update

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Aussie dollar holding above 0.69 US cents

AUD - Australian Dollar

The Australian dollar rallied on Monday following the shock election victory for Scott Morrison and the Liberal-National Coalition party on Saturday claiming 76 seats in the 150-seat lower house of Parliament with a number of seats still in doubt. Yesterday the Aussie dollar reached a high of 0.6933 against the Greenback, lifting strongly against all major crosses, before settling down around 0.6900 level. Looking ahead today and the Reserve Bank of Australia (RBA) will release the Minutes of its latest meeting at 11.30am AEST. The minutes will be closely watched with expectations the RBA will likely reduce official interest rates in the coming months ahead. On Wednesday all attentions turn to RBA Governor Philip Lowe who will offer a speech titled “The Economic Outlook and Monetary Policy”.

From a technical perspective, the AUD/USD pair is currently trading at 0.6908. We continue to expect support to hold on moves approaching 0.6895 while now any upward push will likely meet resistance around 0.6940.

Key Movers

Global equity markets remained under pressure overnight as restrictions on Huawei continue to weigh on market sentiment. Google announced yesterday that it would stop providing some updates to its Android operating system to Huawei for future smartphones. As a result the U.S dollar is roughly unchanged this morning when valued against its major counterparts. Looking ahead today in the US and the macroeconomic calendar is quite light with the only release April Existing Home Sales seen increasing by 2.6% after falling 4.9% in the previous month.

The Euro extended its decline overnight against the U.S dollar falling to 1.1150 on the back of risk-averse headlines US-Sino trade war and Brexit. On the data front today in the EU will see the release of Consumer Confidence for the month of May, which is seen improving just modestly, to -7.6 vs. the previous -7.9. From a technical perspective, the EUR/USD pair is currently trading at 1.1164. We continue to expect support to hold on moves approaching 1.1150 while now any upward push will likely meet resistance around 1.1190.

Expected Ranges

AUD/EUR: 0.6080 - 0.6290 ▲

AUD/GBP: 0.5330 - 5540 ▲

AUD/NZD: 1.0460 - 1.0670 ▲

AUD/USD: 0.6810 - 0.7010 ▲

AUD/CAD: 0.9160 - 0.9370 ▲