The Australian dollar is mostly higher today. AUD is currently the strongest against the British pound and the euro. Yesterday, the currency sold off as the US dollar surged. In general, the Australian dollar remains under pressure due to the country's close economic ties with China. As the Australian dollar is seen as a proxy for China's economic prospects, AUD is likely to continue weakening as trade tensions rise around the world.
There are no notable developments that have influenced the Australian dollar in the past 24 hours. While Australian private sector credit was slightly ahead of expectations, this had a very limited impact on the currency. As China-sensitive assets (such as Hang Seng Index futures and copper prices) enjoy a rebound, the Australian dollar is following suit. Our short-term and medium-term outlook on the currency remains bearish.
AUD/USD is flat today and trading just above 0.7660. EUR/AUD is down slightly and trading above 1.6050. GBP/AUD is down slightly and trading above 1.8340.
Looking at economic data relating to the Australian dollar, this is a relatively light week. HIA new home sales (-0.7% vs. -2.1% prior) were better than previous figures. RBA Assistant Governor Kent suggested that the outlook for the Australian economy was upbeat. MoM private sector credit (0.4% vs. 0.3% expected) was slightly ahead of expectations. Last week, employment changes were worse than expected.