Australian Dollar breaks 70 US cents
Thursday 9 May, 2019
Daily Currency UpdateThe Australian Dollar opened at 0.7011 on Wednesday morning and saw a muted trading day as investors took a breather following the RBA’s decision to keep interest rates on hold this month. Trading in a tight 25 pip range during the Asian session, the release of Chinese Balance figures did little for the Aussie, seeing a 57% decline in their surplus to ¥94bn for the month of April.
A shift in focus overnight was again seen to Sino-US trade negotiations with new tariffs being threatened by US President Donald Trump. The AUD/USD broke critical support lines at 70 US cents, falling to overnight lows of 0.6986. Trumps well renown tweets were in the news overnight as he noted the Chinese Vice-Premier is coming to the United States to make a deal with volatility in currency markets expected to rise as a deal nears.
From a technical perspective, the AUD/USD pair is currently trading at 0.6990. We continue to expect support to hold on moves approaching 0.6950 while now any upward push will likely meet resistance at 0.7040.
Key MoversThe US Dollar was flat against a basket of currencies as investors maintained their positions in the lead up to further trade talks this week between China and the United States. The DXY traded in a tight 20-point range, weakening by a meagre 0.08% and sits at 97.50 this morning.
Cable was one of the worst performers overnight seeing a full cent drop overnight from 1.31 to 1.30. Both trade tensions and Brexit negotiations have hit the Great British Pound this week as it declined from last weeks close of 1.3180. Fading hopes of a cross-party agreement between Conservatives and Labour Party show no sign of improvement.
Markets shift its focus to Chinese inflation print today plus this evenings United States PPI and unemployment claims.
- AUD/USD: 0.6950 - 0.7040 ▼
- AUD/EUR: 0.6200 - 0.6280 ▼
- AUD/NZD: 1.0540 - 1.0680 ▲
- GBP/AUD: 1.8300 - 1.8800 ▼
- AUD/CAD: 0.9370 - 0.9480 ▲