A$ Dips To Fresh 2yr Low, Consumer & Business Confidence Out Today

AUD/USD dipped to a fresh 2yr low post the Asia close. We got sub 0.6720 before sentiment stabilized somewhat. We closed in NY at 0.6733 and currently track close to this level. Broad based USD strength continues, with the DXY index north of 108, although the A$ is the worst performing G10 currency since the start of the week.

• The break lower in the AUD confirms a resumption of the downtrend, with support around 0.6760 giving way. Note 0.6759 was 50.0% retracement of the Mar '20-Feb'21 bull cycle. 0.6685 was the Mar 9 2020 high, a level to be mindful of on the downside, while 0.6874 is the 20-day EMA on the topside.
• Cross asset signals were negative for the AUD. Base metals fell by just over 1.5%, with copper off by 2.6%. Iron ore is sub $108/tonne with YTD lows in sight. Oil held up better (Brent above $106/bbl), as did coal.
• Weakness in metals came despite a bumper China credit report for June, with aggregate finance and new loans printing well above expectations. Fresh Covid concerns are clearly providing an offset.
• US equities finished lower, while the VIX rose back above 26. US yields were mostly lower, but as we noted yesterday, this hasn't had a strong correlation with AUD in the past week.
• On the data front, the CBA household spending measure is first up for June (last 2.9% MoM), followed by Westpac consumer confidence, (last -4.5% MoM), and NAB business conditions and confidence (conditions +16 last, confidence +6 last).