Greenback closes week lower following poor consumer sentiment reading
Monday 16 August, 2021
Daily Currency UpdateThe Australian dollar finished the week higher, overperforming through trade on Friday evening following a greenback selloff after a poor consumer sentiment print in the United States. Opening at 0.7335, the local session saw little movement, trading in a narrow 10-point range for the day before finishing nearly 0.5% stronger to close the week at 0.7369.
With harsher lockdowns extended over the weekend domestically, a strong focus in the market this week will be the economic impact of the latest Delta strain. Our attentions turn to this week’s labour market report due for release on Thursday, giving investors an indication of the extended shutdown to the economy in 2021.
The AUD/USD cross will take its cues this week from the latest Monetary Policy Minutes due for release on Tuesday. The Australian dollar opens this morning at 0.7365. We expect support levels to hold onto moves approaching 0.7320, while any upward push will likely meet resistance at the 74 US cent handle.
Key MoversThe US dollar tracked lower on Friday evening along with Treasury Yields following a disappointing University of Michigan Consumer Sentiment result. The index, released monthly recorded the lowest reading since 2011, dropping by 11 points to 70.2. A mix of a poor economic outlook, surge in coronavirus cases and an increase in inflation were the main contributions to the drop in confidence for the world’s largest economy. The US Index (DXY) which measures a basket of currencies against the greenback, dropped 0.51% to finish at 92.52 at the New York close.
EUR/USD gained 0.6% and Great British pound tracked 0.42% higher, as most currencies were driven higher against the greenback. USD/JPY fell 0.75% as this week’s attention turns to the latest retail sales report on Tuesday evening for the United States. FOMC is also due to release their latest meeting minutes on Thursday. Investors are eagerly awaiting any details around an update re tapering asset purchases before 2022.
- AUD/USD: 0.7320 - 0.7400 ▲
- AUD/NZD: 1.0400 - 1.0500 ▼
- GBP/AUD: 1.8700 - 1.8920 ▼
- AUD/EUR: 0.6220 - 0.6280 ▼
- AUD/CAD: 0.9170 - 0.9250 ▲