The Australian dollar is mostly higher today. The Aussie is making significant gains versus all major currencies except the US dollar. The Australian dollar is currently flat against its US counterpart. While the sell-off in the AUD/USD pair earlier this week was accompanied by significant volumes, trading volumes have been lower over the past two trading sessions. This suggests that bulls are not yet buying the currency with conviction. Today's AUD/USD trading range is 0.7310 - 0.7480.
Looking at domestic news, there are no significant developments relating to Australian economic data or monetary policy today. Instead, the currency is trading as a function of broader changes in the foreign exchange market. Earlier this week, Chinese financial assets (such as the Chinese yuan and Chinese equity market indices) sold off sharply after President Trump threatened to escalate trade tensions with the threat of new tariffs. Given Australia's significant trading relationship with China, the Australian dollar is highly correlated with developments in Chinese financial markets.
Over the past two trading sessions, Chinese markets have been enjoying a rebound. Yesterday, the Australian dollar made back a significant portion of its recent losses against the US dollar. Unfortunately, the rebound appears to be running out of steam today. Our outlook on the Australian dollar remains bearish.
|July 10||NAB Business Confidence JUN||6||7|
|July 11||Westpac Consumer Confidence Index JUL||106.1||102.2|
|July 11||Home Loans MoM MAY||1.1%||-1.4%|
|July 11||Investment Lending for Homes MAY||-0.1%||-0.9%|