A$ Dips On More Moderate China Growth Target

Aussie was a mid-range performer against the USD on Friday and has started the week down after China announced a disappointing 2023 growth target of “around 5%”. AUDUSD finished last week at 0.6770 and is currently trading around 0.6748. The USD index fell 0.5% on lower UST yields and more optimistic equities.

• The February downtrend in AUDUSD remains in place as the pair trade close to recent lows. The break of both the 200- and 100-day moving averages reinforced bearish conditions. The next key support is 0.6629, the December 20 low with initial support at 0.6695, March 1 low.
• Aussie is down against the major crosses at the start of APAC trading. AUDNZD is down 0.2% to 1.0860. AUDJPY is -0.2% to 91.77. Aussie is 0.2% lower versus the euro and pound at 0.6352 and 0.5612 respectively.
• Equity markets were higher on Friday with the S&P 500 up 1.2% and the Eurostoxx up 1.3% while the FTSE was flat. The VIX was down to 18.5%. WTI oil prices were up on the week to finish at $79.85/bbl. LME metal prices rose 1.2% last week. Iron ore is just under $127/t.
• Today the Melbourne Institute inflation gauge for February prints. The focus is on Tuesday’s RBA meeting where another 25bp hike is widely expected.