Aussie stumbles but clings onto 0.77

Daily Currency Update

The sentiment linked Australian dollar stumbled at the close last week, falling to it's lowest level since early May at 0.7677 before recovering to open this morning at 0.7708. Overall, the 0.37% daily decline on Friday led the Aussie to a four-day low came despite a rosy week in global equity markets.
The Aussie enjoyed a brief consolidation period throughout trade on Friday but was met with heavy resistance in the European session. The downward pressure continued the Aussie's gradual decline over the week from the 0.78 level to trade around the 0.77 level. The move lower came due to a number of factors but was primarily led by a resurgent US dollar and a drop in iron ore prices as reflected in the Dalian Commodity Exchange futures contract which is down 17% from its May 12th peak. Adding fuel to the fire was a decline in Australian 10-year bond yields, suggesting that the market may be pricing in a slightly more dovish RBA. In contrast, US 10-year bond yields recorded the steepest rise in over a week on Thursday as expectations of inflation around the corner, spurred demand for the Greenback. Overall, the resurgent Greenback dictated terms on Friday but moderated gains late in the session to leave the Aussie just above 0.77.
Moving into the first week of June, the RBA takes center stage initially. While there is no changes to policy expected to be announced on Tuesday, it will be interesting to note the RBA's stance on current bond policy. Following the RBA statement, Wednesday will have Australia q/q GDP figures and Markets will also tune in to US employment figures set for release on Friday.