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Aussie dollar opens weaker on US-China trade tensions

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AUD – Australian Dollar

The Australian Dollar has opened weaker this morning when valued against the US dollar. On Friday the Aussie fell to a daily low of 0.6847, its lowest for the week. The Aussie dollar weakness has been on the back of last week’s Reserve Bank of Australia (RBA) quarterly Monetary Policy Statement, which showed that policymakers are concerned that additional rate cuts might backfire by denting consumer sentiment. The RBA reiterated its line that it was prepared to ease monetary policy further if needed. Also on Friday the US-China trade deal continued to dominate the headlines with US President Donald Trump hosing down some inherent optimism.

Looking ahead and there’re no macroeconomic releases scheduled in Australia today however the rest of the week is looking a little heavy. Tomorrow we will see the release of the NAB Business Confidence followed by Westpac Consumer Sentiment on Wednesday. Finally on Thursday we will see the release of Employment data which is expected to remain at 5.2%. From a technical perspective, the AUD/USD pair is currently trading at 0.6857. We continue to expect support to hold on moves approaching 0.6840 while now any upward push will likely meet resistance around 0.6895.

Key Movers

In the United Kingdom the Great British Pound was also weaker on Friday against the US dollar down below the 1.2800 level with the Sterling still suffering from the echoes of a dovish Bank of England, as two out of the nine MPC voted for a rate cut. Looking ahead this week and the UK calendar will be quite busy. On Monday we will see the release of Industrial and Manufacturing Production for September, the Goods Trade Balance for the same month, and more relevant the preliminary estimate of Q3 Gross Domestic Product. The economy is expected to have grown by 0.3% in the three months to September, recovering from -0.2% in the previous quarter. From a technical perspective, the GBP/USD pair is currently trading at 1.2773. We continue to expect support to hold on moves approaching 1.2750 while now any upward push will likely meet resistance around 1.2815.

Expected Ranges

AUD/USD: 0.6800 – 0.6900 ▼

GBP/AUD: 1.8550 – 1.8750 ▲

AUD/NZD: 1.0700 – 1.0900 ▼

AUD/EUR: 0.6100 – 0.6300 ▼

AUD/CAD: 0.8950 – 0.9150 ▼


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