AUD range bound in quiet start to the week
Tuesday 18 January, 2022
Daily Currency UpdateThe Australian dollar maintained a narrow handle through trade on Monday as price action across major units was largely muted. Markets ignored a PBOC policy update and Chinese GDP print as both data points offered little beyond market expectations. Instead attentions were drawn to reports the Omicron variant has now been reported in both Beijing and Shanghai. The emergence of the highly contagious strain in China’s most populous cities is concerning. If this latest outbreak gathers pace, China’s COVID zero policy could hamper expectations for economic growth and stretch already strained global supply chains. The AUD bounced between supports at 0.7190 and resistance at 0.7230. With little of note on today’s ticket our attentions remain with Thursday Employment data print and next weeks critical CPI print. Sustained improvement across the labour market and an uptick in domestic price pressures could compel the RBA to again review its forward policy guidance and bring forward it path to policy normalisation.
Key MoversPrice action across major currencies was muted Monday, in what was a very sluggish start to the week. US markets were closed in observance of Martin Luther King Jnr day and with little headline macroeconomic data on hand investors appeared content to sit on the sidelines and maintain a narrow trading range. Having bounced back above 95 on Friday the DXY tracked between 95.04 and 95.35 as the Euro struggled to extend beyond 1.1430, the Pound slipped back below 1.3650 and the Yen gave up 114.50. Our attentions today turn to A Bank of Japan policy outlook and rate announcement. We expect few changes from the current policy setting.
- AUD/USD: 0.7170 - 0.7290 ▼
- AUD/EUR: 0.6290 - 0.6350 ▲
- GBP/AUD: 1.8820 - 1.9050 ▼
- AUD/NZD: 1.0570 - 1.0630 ▲
- AUD/CAD: 0.8990 - 0.9060 ▼