australian-dollar-jumps-back-through-0.72-as-us-weakness-resumes

Australian Dollar jumps back through 0.72 as US weakness resumes

Posted by OFX

AUD – Australian Dollar

The Australian dollar surged back through 0.72 US cents through trade on Monday, lead higher following a jump in equities and an improvement in risk sentiment. Having struggled to break above 0.7170 through much of the domestic session the AUD rallied overnight touching intraday highs at 0.7225. A continuation in US dollar weakness was the primary driver as softer than expected regional manufacturing data and a dip in business confidence cast doubts over the strength of any US economic recovery to date.

Attentions this week turn to the Fed and the minutes from its last meeting. With the AUD failing to break resistance at 0.7230/40 any shift in the policy outlook, in particular a shift in the average inflation target, could add heightened pressure on real interest rates and provide the catalyst to push the AUD nearer 0.73. Our focus today turns to RBA minutes. Governor Lowe outlined the Banks position and decision-making process to the House of Representatives Committee on Economics on Friday, and we expect little deviation from this message. Watch resistance on moves approaching 0.724 with support in play on dips toward 0.7130.

Key Movers

Sterling remained range round through much of Monday as investors brace for more volatility ahead of new trade talks between the UK and EU. Officials are racing to find a compromise before the end of 2020 when the UK will be set adrift from the common market, relinquishing all preferential trade agreements. Unless a deal can be struck Sterling faces significant headwinds. The UK was one of the worst hit European country by the Pandemic and has suffered the biggest economic contraction fo any G7 nation. Failure to secure favourable ongoing trade conditions could be catalyst to break the back of the recent GBP run and force a correction back toward 1.20.

Expected Ranges

AUD/EUR: 0.6010 – 0.6130 ▲” data-reactid=”37″ type=”text”>AUD/EUR: 0.6010 – 0.6130 ▲

AUD/NZD: 1.0880 – 1.1120 ▲” data-reactid=”39″ type=”text”>AUD/NZD: 1.0880 – 1.1120 ▲

Australian Dollar jumps back through 0.72 as US weakness resumes appeared first on .” data-reactid=”41″ type=”text”>The post Australian Dollar jumps back through 0.72 as US weakness resumes appeared first on .

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