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Australian dollar steady

AUD - Australian Dollar

The Australian dollar traded within a tight range between 0.7056 – 0.7030 yesterday against the Greenback. Pulling back from last week’s high of 70.73 US cents, a level not seen since late April. In yesterday’s early trade the Aussie dollar initially fell on the back of Greenback demand although buyers defended the downside at 0.7030. Looking ahead today and there are no economic releases of note. All attentions will turn to the ongoing US-China trade talks. The Chinese government met with domestic soybean buyers about a plan to purchase more US supplies, including wavering China’s retaliatory tariffs on the goods. On Thursday the Reserve Bank of Australia (RBA) Governor Philip Lowe is due to deliver a speech titled "Inflation Targeting and Economic Welfare" at the Anika Foundation Luncheon, in Sydney.

From a technical perspective, the AUD/USD pair is currently trading at 0.7031. We continue to expect support to hold on moves approaching 0.7030 while now any upward push will likely meet resistance around 0.7080.

Key Movers

The U.S. dollar was little changed overnight as traders await decisions by the U.S. Federal Reserve on how much and quickly they may reduce interest rates. The greenback has been dragged down in recent days by forecasts the Federal Reserve will likely cut U.S. interest rates for the first time in a decade, also in response to global trade tensions and weak inflation. Expectations have firmed that the Fed will start the easing cycle with a 25bps cut. Looking ahead today the US will release the May Housing Price Index, Existing Home Sales for June and the Richmond Fed Manufacturing index for July.

The EUR/USD pair has spent most of this Monday confined to a tight range around 1.1210 as market traders are anticipating more dovishness from European policymakers on Thursday. Market is expecting European policymakers will lower a key deposit rate by 10 basis points to -0.50 basis point to combat risk from global trade tensions. From a technical perspective, the EUR/USD pair is currently trading at 1.1207. We continue to expect support to hold on moves approaching 1.1180 while now any upward push will likely meet resistance around 1.1245.

Expected Ranges

AUD/USD: 0.7000 - 0.7100 ▼

GBP/AUD: 1.7630 - 1.7830 ▲

AUD/NZD: 1.0300 - 1.0500 ▼

AUD/EUR: 0.6150 - 0.6350 ▼

AUD/CAD: 0.9130 - 0.9330 ▼