Free Trial

AUD/USD Prints Fresh 2yr Low, Before Finding Support

AUD

AUD/USD touched a fresh 2yr low post the Asia close on Friday (0.6764), but we recovered through NY trading, ending the week at 0.6814. We currently track slightly higher at 0.6820.

  • Higher US equities and a lower VIX, down to 26.7% from 28.7%, helped lift the A$ off the canvas through the Friday offshore session. AUD/JPY dipped as far as the low 91.40 region, but we rebounded back above 92.00 (last 92.25).
  • Commodities remained a headwind, for the most part. Base metals fell a further 2.58%, copper to fresh lows sub $360, and lost 3.25% last week. Iron ore is back to a $113.4/tonne handle. Global growth concerns continuing to weigh. The US Atlanta Fed GDP Nowcaster is now at -2.078%. Oil recovered though, Brent back above $111/bbl.
  • US yields were down, the 2 and 10yr off by 12bps and 13bps respectively, but recovered into the NY close. Yield spreads remain a headwind for the A$, although the focus in the early part of this week will tomorrow's RBA decision. A 50bps hike is widely expected.
  • Ahead of that today delivers the Melbourne Institute Inflation gauge for June (last was 1.1% MoM). ANZ job ads for June are also out (last 0.4%). Home loans (-2.5% expected, -6.4% previously) are also out for May, along with building approvals (-2.0% forecast, -2.4% last).
  • The technical picture remains negative for the A$. The move lower signals scope for weakness towards 0.6759, the 50.0% retracement of the Mar '20 - Feb ' 21 bull cycle. Note on the top side, 0.6979 represents the 20-day EMA.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.