Home Daily Commentaries Australian Dollar maintains levels above 69c

Australian Dollar maintains levels above 69c

Daily Currency Update

The Australian Dollar managed to hold on to gains made late last week which pushed the AUD/USD rate off multi-month lows and back above 69c. In the absence of any top-tier macroeconomic data locally the Aussie looked offshore for direction and thanks mainly to poor US data and a lack of follow-through in equities this was enough to keep the pair afloat. Rising tensions between the U.S. and Iran have also kept the Aussie at the levels.
On the release front Australia did see the release of Flash Manufacturing PMI and Flash Services PMI data which reported local businesses have seen a pick-up in activity this month with the service sector enjoying the fastest pace of growth in seven months. The CBA-Markit purchasing management index (PMI) for services and manufacturing climbed to 53.1 in the first 19 days of June, up from 51.5 in the comparable May period. The steeper rise in overall activity was underpinned by a solid increase in new business that was also the most marked since last November. Meanwhile, business confidence regarding output over the year ahead improved to its highest since January which was partly boosted by the election.
Looking ahead, the RBA Governor is due to speak today in Canberra. From a technical perspective, the AUD/USD pair is currently trading at 0.6930. We expect support to hold on moves approaching 0.6850 while now any upward push will likely meet resistance around 0.6940 and 0.7000 levels.

Key Movers

The U.S. Dollar index was down on Friday following rising tensions between the U.S. and Iran and also weaker than expected PMI data which increased support for the Fed to cut rates next month. IHS Markit said its flash U.S. manufacturing Purchasing Managers Index for June declined to a reading 50.1, down from May’s reading of 50.5. Economists were expecting to see a reading of 50.5. At the same time, the firm’s service sector PMI reading dropped to 50.7, down from May’s reading of 50.9 but relatively in line with expectations. According to the report, sentiment within the manufacturing sector is at its lowest point in 117 months.
EUR/USD moved higher gaining 0.6% and the GBP/USD recouped all losses from earlier in the session closing at 1.2740. Wall Street also opened lower as U.S. President Donald Trump said via Twitter that he had come within minutes of firing missiles at Iran in response to it shooting down a surveillance drone.

Expected Ranges

  • AUD/USD: 0.6840 - 0.7000 ▲
  • GBP/AUD: 1.8280 - 1.8500 ▲
  • AUD/NZD: 1.0420 - 1.0550 ▼
  • AUD/EUR: 0.6060 - 0.6140 ▼
  • AUD/CAD: 0.9100 - 0.9200 ▲