The Australian dollar is weaker today, and is currently selling off against all major currencies. AUD is weakest against the British pound and the US dollar. Looking at the Dow Jones Commodity Index (a weighted measure of commodity prices), commodity prices are mostly lower today. As a commodity exporter focused on China, the Australian dollar is highly correlated to global commodity prices. Recent weakness in the sector is thus weighing on the Aussie. Looking at Chinese financial markets, Hong Kong's Hang Seng index ended the day lower. Given Australia's significant trading relationship with China, falling risk sentiment in the country tends to have an adverse effect on AUD. Our short-term outlook on the currency remains neutral, while our medium-term outlook is bullish.
AUD/USD is down today and trading just above 0.7820. EUR/AUD is up and trading above 1.5740. GBP/AUD is up and trading above 1.7860.
This is a fairly light week for economic data relating to the Australian dollar. The RBA’s meeting minutes suggested that the Bank remains on hold. RBA Assistant Governor Bullock stated that mortgage stress in Australia remains low. The wage price index (2.1% vs. 2% YoY expected) beat consensus estimates. Last week, Australian jobs were slightly ahead of expectations. However, the number of full-time jobs fell.