AUD Daily Updates

16 February 2018

The Australian dollar is fairly mixed today as the global stock market rebound runs out of steam. As a commodity currency, the Australian dollar is highly sensitive to global risk taking appetite. Today, investor sentiment appears to be waning based on global equity and commodity markets. Looking at Asian financial markets, key stock markets including China's Shanghai Composite and Japan's Nikkei 225 have only rebounded to a very limited extent. Austalia's ASX 200 is currently selling off. Relative to its major peers, AUD is currently flat against the US dollar while gaining against the euro and the British pound. As the currency has been fairly weak in the short-term, our outlook remains neutral. In the medium-term, we remain mildly bullish on the Australian dollar's prospects. 

AUD/USD is down slightly and trading just above 0.7920. EUR/AUD is down and trading above 1.5710. GBP/AUD is down and trading above 1.7690.

Looking at economic data from Australia this week, traders will be watching employment figures. NAB business confidence (12 vs. 11 prior) was ahead of previous numbers. Westpac consumer sentiment (-2.3% vs. 1.8% prior) was below previous figures. Tomorrow is the most important day, and we'll see employment changes, the unemployment rate and consumer inflation expectations. On Friday, RBA Governor Philip Lowe will deliver a speech. Last week, the trade balance was significantly below estimates thanks to higher-than-expected imports. 

Updated 
Short term outlook
Neutral

As the Australian dollar runs out of steam, we are downgrading the currency to neutral. Looking at a daily chart of the Aussie, the currency is trading within a normal range. This is based on various technical indicators.  

Medium term outlook
Bullish

As the Australian dollar rebounds, we are now bullish on the Australian dollar in the medium-term. Looking at a weekly chart, the Aussie is trading within normal conditions. Our analysis is based on various technical indicators.  

Updated