Home Daily Commentaries Aussie dollar continues to trade below 70 US cents

Aussie dollar continues to trade below 70 US cents

Monday 1 August, 2022

Daily Currency Update

The Australian dollar is steady this morning, trading just below 70 US cents. The AUD/USD pair advanced within range on Friday reaching a daily high of 0.7031, but higher than estimated US inflation figures triggered a U-turn with safe-haven peers leading the pack. The AUD/USD is currently trading at 0.6977 and still indicating a bullish bias. A test of 70 US cents seems likely over the next session if it remains above 0.6950. Below the next support stands at 0.6910. Looking ahead this week and today we will see the release of the Australia and New Zealand Banking Group (ANZ) Job Advertisements, along with the Australian Industry Group (AIG) Manufacturing Index, which surveys about 200 manufacturers and asks respondents to rate the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries and inventories. On Tuesday we will see the release of monthly Building approvals and the Index of Commodity Prices. However all eyes will be on the Reserve Bank of Australia (RBA) cash rate announcement, which is expected to lift the official cash rate from 1.35% to 1.85%. On Wednesday the Australian Bureau of Statistics will release the monthly Retail Sales figures, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. Finally on Thursday we will see the release of the monthly Trade Balance figures.

Key Movers

In the United States on Friday the US Employment Cost Index (ECI), the most comprehensive measure of US wage growth, was stronger than expected, with private sector wages and salaries increasing by a sizeable 1.6% over the quarter, taking its annual rate of wage inflation to 5.7%. Average hourly earnings data from the nonfarm payrolls report had been suggesting some moderation in wage pressure. Equity markets capped off a good week with another strong performance on Friday, the S&P500 increasing 1.4%, the NASDAQ up almost 2% and the EuroStoxx 600 index was up by more than 1% for the second day running. Over the month, the NASDAQ was up more than 12% and the S&P500 more than 9%, their best monthly performance since 2020. Looking ahead tonight in the US and all eyes will be on the Purchasing Managers' Index (PMI), which is a survey of about 800 purchasing managers and asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries and inventories. Looking ahead this week and on Thursday we will see the release of monthly Trade figures. On Friday we will see the Unemployment Rate figures, which is expected to remain steady at 3.6%.

Expected Ranges

  • AUD/USD: 0.6900 - 0.7100 ▲
  • AUD/EUR: 0.6800 - 0.7000 ▲
  • GBP/AUD: 1.7350 - 1.7550 ▼
  • AUD/NZD: 1.1000 - 1.1200 ▲
  • AUD/CAD: 0.8850 - 0.9050 ▲