After ending the day flat on Friday, the Australian dollar is enjoying a small rebound this morning. While there has been limited news in the past few days that has influenced the currency, Australian bond yields are up sharply this morning following higher yields in China. On the other hand, US, Japanese and German bond yields are falling. As AUD interest rates rise, the currency is stronger as a result. Despite today's strength, our short-term and medium-term trending indicators continue to suggest a bearish trend.
AUD/USD is currently up and trading just above 0.7520. Looking at EUR/AUD, the pair is down slightly and currently just above 1.5650. The GBP/AUD exchange rate is up and currently above 1.7780.
This is a pretty light week for economic data and events relating to the Australian dollar. We’ll see HIA new home sales on Monday. On Tuesday, we’ll get the government’s mid-year economic and fiscal outlook as well as house price index figures. On Wednesday we’ll see Westpac consumer confidence. On Thursday we’ll see changes in employment as well as the unemployment rate. Last week, GDP growth missed expectations on consumer weakness.