Australian dollar unable to maintain upswing in face of stronger US data
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Daily Currency Update
The Australian dollar fell on Thursday, unable to maintain its break above US$0.66 amid a broadly stronger US dollar. An upswing across several US macro data sets and now new tariff headlines prompted markets to take profit on moves above US$0.6620. US Flash PMI’s for July painted a stronger than anticipated picture of the US economy, with Manufacturing and Service sectors performing better than expected, while jobless claims fell for a sixth consecutive week, reaching their lowest level since April. The upbeat data helped drive US yields higher and the AUD lower, prompting a break back below US$0.6590 overnight. Having found support on moves approaching US$0.6580, the AUD opens this morning buying US$0.6595.With little of note on today’s macro agenda, our focus remains with tariff and trade headlines. While the prospect of a trade deal between the US and EU still seems some way off, any announcements that points to an agreement being reached ahead of the August 1 deadline should help fuel risk demand into the weekly close.
Key Movers
With no tariff headlines to spur direction on Thursday, attentions overnight turned to the European Central Bank for guidance and direction. It was expected to be a non-event with policy makers maintaining the current policy setting, while reiterating the banks wait and see mantra. In many ways this is exactly how it played out, that is until ECB President Christine Lagarde’s press conference. Lagarde adopted a much more hawkish tone than markets anticipated, indicating the growth conditions will need to deteriorate for further rate cuts to be issued. With the current rate at or near its terminal level and inflation well contained near the 2% target, the banks decision makers seem content in simply monitoring rates, at least until a trade deal is brokered and the impacts of the US tariff agenda are clearer. European yields rose as investors pared back rate cut pricing through the rest of 2025. The euro bounced off intraday lows near 1.1730, rallying to a session high of 1.1782 before correcting back toward 1.1750.In other news, the yen has been the poorest performing major through the last 24 hours, while the USD DXY index has edged higher as the pound also gave up half a percent, sliding back toward 1.35.
With little of note on today’s macro ticket our focus remains with tariff and trade news.
Expected Ranges
- AUD/USD: 0.6480 - 0.6630 ▼
- AUD/EUR: 0.5550 - 0.5650 ▲
- GBP/AUD: 2.0300 - 2.0700 ▼
- AUD/NZD: 1.0880 - 1.0980 ▲
- AUD/CAD: 0.8920 - 0.9050 ▲