Aussie dollar opens slightly weaker against the greenback

Daily Currency Update

The Australian dollar continued to fall to new lows against the greenback closing on Friday at the lowest since July 2020 down towards the 0.70 level. The Aussie dollar has been hit hard recently with the emerging Omicron COVID-19 variant, which could weaken global growth prospects. The greenback has been rallying across the board of late as the Federal Reserve has been gearing up to tighten monetary policy faster than the market had previously anticipated.

On the data front last Friday we saw the release of October Building Permits which plummeted 12.9% (month on month) and third-quarter Gross Domestic Product which contracted by 1.9% (Quarter on Quarter) better than the -2.7% expected. Looking ahead this week, and it's quite a busy week ahead, volatility is likely to stay elevated. On Monday we will see the release of the November TD Securities Inflation. The Reserve Bank of Australia has noted that higher inflation won’t affect their monetary policy stance and that a rate hike before 2024 is unlikely. The Reserve Bank of Australia will meet on Tuesday with market expectations official interest rates will be left on hold once again at 0.1%. From a technical perspective, the AUD/USD pair is currently trading at 0.7002. We continue to expect support to hold on moves approaching 0.6960 while now any upward push will likely meet resistance around 0.7100.