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Aussie dollar weighed down by US equities

Daily Currency Update

The Australian dollar closed the week weaker when valued against the Greenback weighed by a fall in US equities on Friday. On the data front last week we saw the release of December Westpac Leading Index, which contracted to 0.12% form 0.69%. Inflation in the country was up by 0.9% YoY in the last quarter of the year. While Business Confidence contracted from 13 to 4 in December, according to NAB. Looking ahead this week on Monday and we will see the release of AIG Manufacturing Index and ANZ Job Advertisements m/m for the month of January. On Tuesday all eyes will be on the Reserve Bank of Australia interest rate decision which is forecast to remain at 0.10%. On Wednesday we will see the release of monthly Building Approvals m/m and the AIG Construction Index. Finally on Thursday we will see the release of NAB Quarterly Business Confidence and monthly Trade Balance figures. From a technical perspective, the AUD/USD pair is currently trading at 0.7611. We continue to expect support to hold on moves approaching 0.7605 while now any upward push will likely meet resistance around 0.7685.

Key Movers

The US dollar has fallen over 13% from its high since last March last year thanks largely to historic moves by the Federal Reserve to inject liquidity into the financial system. The Federal Reserve announced its latest monetary policy decision, and as widely estimated, they left rates and bond-buying programs unchanged. On the release front on Friday we saw the release of US Durable Goods Orders which rose by a modest 0.2% for the month of January. Quarterly Gross Domestic Product was up 4.0%, above market forecasts, while weekly unemployment claims continued to shrink down 85K from the previous week ending January 22. Looking ahead this week in the US and all eyes will be on Thursdays Unemployment Claims which is expected to have added 875K new jobs in the month. On Friday we will see the release of Unemployment Rate which is expected to remain at 6.7%.

Expected Ranges

  • AUD/USD: 0.7550 - 0.7750 ▼
  • AUD/EUR: 0.6150 - 0.6350 ▼
  • GBP/AUD: 1.7800 - 1.8000 ▲
  • AUD/NZD: 1.0550 - 1.0750 ▼
  • AUD/CAD: 0.9650 - 0.9850 ▼