Australian dollar holds up in the face of stronger US data
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Daily Currency Update
The Australian dollar outperformed through trade on Thursday and continues to trade around US$0.68, despite softer than expected CAPEX data. The latest CAPEX report for Q2 showed a steeper than anticipated decline in expenditure, as building and construction projects stalled and non-mining industries marked a near 8% decline. Markets seemingly chose to ignore the sour print and instead an extension in the Iron ore recovery and a broader rebound across key commodities helped underpin AUD gains. Having marked intraday highs just short of US$0.6825, the Australian dollar retreated overnight, yet is still bouncing either side of US$0.68 and currently trades at US$0.6797.Our attentions turn now to a crowded macro ticket with domestic retail sales data dominating the local docket, while Tokyo CPI, NZ consumer confidence data, Euro CPI, Canadian GDP and US PCE deflators lead us into the weekly close.
Key Movers
The US dollar was among the notable top performers through Thursday, with the US DXY index climbing three tenths of one percent, while the euro and GBP both moved lower. US data releases mostly exceeded expectations, with Q2 GDP data surprising analysts as the economy grew at a faster pace than anticipated, with consumer consumption data proving remarkably resilient. US jobless claims stayed flat, driving US treasuries higher, making solid gains against European yields, as euro macro data fell short of expectations. German CPI data fell faster than expected, marking its lowest reading in three years, while Spain’s inflation fell quicker than expected, reinforcing expectations for another 25 basis point rate cut from the ECB. The euro fell 0.4% for the day and is down almost 1 cent for the week, coming off highs above 1.12 on Monday to settle near 1.1105 on open this morning.Our attentions turn now to a crowded macro ticket with Tokyo CPI, Australian Retail Sales, Euro area CPI, Canadian GDP and US PCE deflators leading us into the weekly close.
Expected Ranges
- AUD/USD: 0.6720 - 0.6830 ▲
- AUD/EUR: 0.6080 - 06180 ▲
- GBP/AUD: 1.9280 - 1.9480 ▼
- AUD/NZD: 1.0800 - 1.0900 ▼
- AUD/CAD: 0.9100 - 0.9200 ▲