Australian dollar closes week below 74 US cents
Daily Currency Update
The risk off mood persisted till the New York closed on Friday evening. Equity markets closed lower, weighed down by technology stocks. The Australian dollar in alignment with equities finished 0.35% in the red and fell to below 74 US cents for the first time since November 2020.Markets will be eagerly watching the ongoing uncertainty surrounding the latest Delta variant, putting the domestic economy at a standstill. Riskier assets continue to be weighed down by uncertainty for global growth projections as the AUD/USD closed at 0.7393.
The AUD/USD cross will take its cues this week from the latest Monetary Policy Minutes due for release on Tuesday. The Australian dollar opens lower this morning at 0.7401. We expect support levels to hold onto moves approaching 0.7340, while any upward push will likely meet resistance at 0.7440.
Key Movers
The US dollar tracked higher on Friday following a positive retail sales reading for the month of June. Consumers increased their spending by 1.3% m/m, a much better result from the previous number which dropped 0.9%. The US Dollar Index (DXY), which measures a basket of currencies against the world’s most liquid currency was 0.16% higher and closed at 92.71 for the week.Elsewhere the Japanese Yen dropped 0.2% against the greenback to 110.03 following the Bank of Japan central bank meeting. As widely expected, there was no change to their Yield curve control target at -0.1%. The meeting focused on a revised projection of economic growth, projected downwards by 0.2% to 3.8% and a zero-interest climate scheme to tackle climate change.
The EUR/USD finished 0.08% lower as European final inflation figures came in at expectations of 1.9% for the year. This week’s central bank focus is on the ECB due to update markets on their latest monetary strategy on Thursday. The GBP/USD fell to one-week lows of 1.3755, representing a 0.47% drop on Friday.
Expected Ranges
- AUD/USD: 0.7340 - 0.7440 ▼
- GBP/AUD: 1.8400 - 1.8700 ▲
- AUD/NZD: 1.0500 - 1.0600 ▼
- AUD/EUR: 0.6240 - 0.6300 ▼
- AUD/CAD: 0.9300 - 0.9380 ▼