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Australian dollar falls under 70c on U.S data

AUD - Australian Dollar

Unable to hold above the psychological level of 70 cents vs the Greenback, the Australian dollar opens weaker this morning and is buying 0.6977 at the time of writing. Friday’s local data showed a rise in the AiG’s performance of construction index moving from 40.4 the month prior to 43.0 in June which indicates a slight easing in the construction industry’s overall rate of contraction. The data had little effect on the AUD/USD rate where most of it’s moves came from offshore events following a better-than-expected US payrolls report. The AUD/USD shed approximately 0.7% and touched a low of 0.6957 after the data and only managed to recoup 20 or so bps to close the first week of July at 0.6977.

Looking ahead, locally it is a relatively quiet week on the data front with key stats limited to business and consumer confidence Tuesday and Wednesday. Today sees the realise of low tier ANZ Job advertisements. From a technical perspective, support sits at 0.6967 a sustained move under this could lead to 0.6940 and 0.6914. On the flip side, resistance is seen at 0.7000 followed by 0.7030.

Key Movers

The US Dollar Index which measures the strength of the Greenback against a basket of six major currencies jumped to a three-week high following a sharp rebound in U.S jobs growth for the month of June. The economy added 224k new jobs, well above consensus expectations for 160k, and smashing May’s number of 75k. The market shrugged off the rise in unemployment from 3.6% to 3.7% as now the view is that Federal Reserve will not cut rates so aggressively of 50bp but will be 25bp this month.

Over in the UK, house prices fell 03% in June House prices fell 0.3% in June according to Halifax, indicating that prices are continuing to struggle against the backdrop of Brexit uncertainty. Away from the numbers, the leadership race and chatter over Brexit also pegged the Pound back from any breakout on the week. The Pound ended the week down by 1.38% to $1.2521.

Expected Ranges

AUD/USD: 0.6930 - 0.7040 ▼

GBP/AUD: 1.7800 - 1.8050 ▲

AUD/NZD: 1.0490 - 1.0590 ▲

AUD/EUR: 0.6170 - 0.6260 ▼

AUD/CAD: 0.9080 - 0.9160 ▼