The Australian dollar fell yesterday and is trading sideways this morning. The currency has been fairly weak relative to global peers. While other commodity currencies such as the Canadian dollar and the Norwegian krone have been supported by crude oil prices, the Aussie is not getting the same benefit from copper or iron ore. Instead, the currency has been weak given Australia's reliance on exports to China. As the Chinese yuan remains weak, the Australian dollar has followed. Both our short-term and medium-term outlook is bearish.
AUD/USD is currently trading just above 0.7610. Looking at EUR/AUD, the pair is currently just above 1.5370. The GBP/AUD exchange rate is currently above 1.720.
This week’s economic data contains consumer confidence, employment and consumer inflation expectations. NAB business conditions were stronger than the last print (21 vs. 14 prior) as were confidence figures (8 vs. 7 prior). On Wednesday, we’ll see Westpac Consumer Confidence. Later on Thursday, we’ll get employment changes and the unemployment rate. Last week, the RBA maintained its cash rate (1.5%) while suggesting a weak outlook for inflation.