Daily Currency Update
AUD - Australian DollarThe Australian dollar drifted back toward 0.74 through trade on Tuesday in what was a largely lacklustre session absent of any news outside the current narrative. Ongoing US fiscal stimulus and Brexit negotiations dominated market attentions but offered little to prompt any firm action as both talking points trudge ever so slowly toward an accord. Having touched intraday highs at 0.7435 the AUD trended toward intraday lows at 0.7400 amid a broader negative bias. With little conviction behind the downturn the AUD then bounced between 0.7400 and 0.7420 through the latter half of the overnight session and continues to hold above supports buying 0.7407 US cents at the time of writing. With little of note on today’s domestic docket our attentions turn to US inflation data and the ECB policy meeting as markers of macroeconomic direction. With few surprises expected the broader risk narrative and ongoing attention to key headlines will continue to steer direction into the 2nd half of the week.
Key Movers
Currency markets offered little to inspire analysts through trade on Tuesday, with the majority of major currencies trending sideways through much of the day, chasing a catalyst to drive direction. The Great British Pound was the only Major unit to offer any meaningful movement, diving back below 1.33 to mark intraday lows at 1.3290 before a run of whippy trading saw it bounce between 1.3290 and 1.3380. Having drifted downward amid fears a Brexit deal will not be reached in time, markets were emboldened, following reports an agreement on the management of the Irish/Northern Ireland border had been agreed. While the agreement is separate to trade negotiations it at least suggests a broader compromise can be reached. Our attentions today turn to the ECB policy meeting. While last week's rapid appreciation appears to have stalled the Euro continues to trade above 1.21, having punched through resistance at 1.20 with relative ease. While we expect few surprises from the ECB we are keenly attuned to any commentary that suggest they may intervene to ensure further currency appreciations do not derail a 2021 recovery.
Expected Ranges
- AUD/USD: 0.7380 - 0.7450 ▼
- AUD/EUR: 0.6080 - 0.6140 ▼
- GBP/AUD: 1.7880 - 1.8120 ▲
- AUD/NZD: 1.0450 - 1.0590 ▼
- AUD/CAD: 0.9425 - 0.9530 ▼