Home Daily Commentaries AUD tests 0.74 as all eyes turn to US payroll print

AUD tests 0.74 as all eyes turn to US payroll print

Daily Currency Update

The Australian dollar extended the weeks bullish run, advancing through 0.74 US cents in what was otherwise a largely quiet day across financial markets. Investors broadly chose to sideline larger bets ahead of tonight’s all important US non-farm payroll print, however, expectations for employment growth have faltered this week amid a softening across leading indicators forcing the US dollar lower and allowing the AUD to build on last weeks risk on recovery. The AUD touched intraday highs at 0.7406 overnight, before maintaining a narrow trading handle into this morning’s open. We anticipate the AUD will track sideways through the domestic session, as resistance on moves beyond 0.74 ahead of the US labour market print contains any upside extension. The delta variant continues to pose a serious threat to the US economic recovery and a miss on this month’s labour market print will all but waylay any QE tapering announcement, heaping pressure on the USD and opening the door for the AUD to extend beyond 0.74 US cents.

Key Movers

Price action across markets was largely subdued through Thursday as investors wait on US payroll data. The US dollar has come under mounting pressure this week as leading indicators point to a further softening in labour market performance. A slow down in employment growth in July may be extended through August as the complications and challenges posed by the delta variant delay the broader US economic recovery. Tonight’s print is crucial in determining near term direction. The Fed has signaled a move to taper QE will not be brought forward unless the labour market shows significant moves to full employment. With estimates falling between 400K-725K, a miss to the low side will spur an extended rally across risk assets as the promise of accommodative monetary policy continues.

Expected Ranges

  • AUD/USD: 0.7290 - 0.7490 ▲
  • AUD/EUR: 0.6180 - 0.6270 ▲
  • GBP/AUD: 1.8520 - 1.8820 ▼
  • AUD/NZD: 1.0380 - 1.0450 ▼
  • AUD/CAD: 0.9250 - 0.9340 ▼