Daily Currency Update
AUD - Australian DollarThe Australian dollar bounced off fresh lows at 0.6935 through trade on Tuesday yet failed to make any significant inroads into recovering recent losses and reversing the bearish shift. In the absence of headline data the AUD found support in comments from US and Chinese trade officials and President Donald Trump, wherein all parties insisted trade talks were not dead. Trump was adamant the increased tariffs were nothing more than a “squabble” that would be resolved. Having touched 0.6958 the AUD failed to maintain the upturn as the overwhelming uncertainty and widespread shift away from risk assets weighed on investors.While attentions remain squarely affixed to US/China trade negotiations as a driver of broader risk appetite our focus turns to today’s all important local quarterly wage price print. As pressure mounts on the RBA to loosen monetary controls today’s marker of wage growth will be a crucial indicator of broader labour market performance. A poor print could force the AUD through support at 0.6930, while a surprise to the upside eases the pressure on the RBA and may prompt a bounce back through the psychological 0.70 U.S. cent handle.
Key Movers
The Euro slid against the dollar on Tuesday as fresh concerns surrounding Italian economic stability weighed on the combined unit. Reports Italy is prepared to break European budget rules on debt in a bid to stimulate the domestic economy and drive employment growth forced investors to short the Euro and force the common currency toward a break back below 1.12. The GBP touched a two-week low on Tuesday as wage price data fell short of market expectations as employment growth missed the mark considerably amplifying concerns recent strength may have been a transitory benefit of industry front running Brexit uncertainty. Falling through 1.30 sterling touched 1.2906 and we expect ranges to be maintained until a clear Brexit path is laid.
Expected Ranges
- AUD/USD: 0.6880 - 0.7020 ▲
- AUD/EUR: 0.6150 - 0.6250 ▲
- GBP/AUD: 1.8430 - 1.8680 ▼
- AUD/NZD: 1.0520 - 1.0620 ▼
- AUD/CAD: 0.9280 - 0.9380 ▼