Aussie dollar continues to trade below 70 US cents
Friday 29 July, 2022
Daily Currency UpdateThe Australian dollar is slightly weaker this morning, trading just below 70 US cents. The AUD/USD pair advanced within range on Thursday reaching a daily high of 0.7014. The AUD/USD is currently trading at 0.6990 and still indicating a bullish bias. A test of 70 US cents seems likely over the next session if it remains above 0.6950. Below, the next support stands at 0.6910.
Yesterday on the data front Australian retail turnover rose 0.2 per cent in June 2022 to another record level, according to the Retail Trade figures released today by the Australian Bureau of Statistics (ABS). The June result followed a revised 0.7 per cent rise in May 2022, a rise of 0.9 per cent in April 2022 and a rise of 1.6 per cent in March 2022. Results were mixed across the six industries, as cost-of-living pressures appear to be slowing the growth in spending. Cafes, restaurants, and takeaway food services had the largest rise, up 2.7 per cent, followed by clothing, footwear, and personal accessory retailing (1.3 per cent), and other retailing (0.5 per cent). Looking ahead today on the data we will see the release of the Producer Price Index (PPI), another leading indicator of consumer inflation.
Key MoversIn the United States overnight US Q2 GDP growth came in weaker than the economist consensus, with the economy contracting at a 0.9% annualised rate in Q2 (+0.4% expected), the second straight quarter of negative growth. While the negative Q1 growth figure was largely due to a big hit from net exports, there were genuine signs of a slowdown in domestic activity in the Q2 numbers. Consumption slowed to a 1% annualised rate, while business investment was broadly flat and residential investment slumped 14% off the back of the slowing housing market. The two consecutive quarters of negative growth means the US now meets a common definition of a ‘technical recession’. However, note that the US has its own recession dating committee (via the NBER), which looks at a broader range of indicators than just GDP.
Looking ahead tonight in the US, the two key releases are the Employment Cost Index, the most comprehensive measure of US wage growth, and 5-10yr inflation expectations from the University of Michigan survey. Inflation expectations unexpectedly fell to 2.8% in the preliminary survey release, but the results are sometimes revised when the final results come out.
- AUD/USD: 0.6900 - 0.7100 ▲
- AUD/EUR: 0.6750 - 0.6950 ▲
- GBP/AUD: 1.7300 - 1.7500 ▲
- AUD/NZD: 1.1000 - 1.1200 ▲
- AUD/CAD: 0.8850 - 0.9050 ▲