AUD steady despite concern surrounding China’s GDP outlook

Daily Currency Update

Despite a surge across key equity indices and uptick in risk sentiment, the AUD remained largely range bound through trade on Thursday tracking between supports at 0.7050 and resistance at 0.7110. Stronger than anticipated earnings reports for key US retailer Macy’s, helped bolster demand across equity markets, dampening fears of a marked correction in the US growth outlook. The S&P 500 and the Nasdaq both charged higher, yet failed to spur activity across other financial assets, with bonds and currencies largely flat on the day. Having tested a break above 0.71, the AUD shifted toward intraday lows amid sustained concerns surrounding China’s growth outlook. The Chinese yuan fell near 1% on the day, with the USD extending back toward 6.75 as markets revise expectations for GDP. While Shanghai schools re-open after a 3-month lockdown, there are fresh fears Beijing is on the precipice of an extended lockdown, as community transmitted cases continue to emerge in new pockets across the city. Having touched intraday lows at 0.7059, the AUD found support through the overnight session.

Our attentions turn now to domestic retails sales data ahead of US trade data, personal income and spending reports, consumer sentiment, and PCE deflator data for direction leading into the weekly close.