The Australian dollar continues to sell off and has now weakened for the past four sessions. The currency has been especially weak against the pound (which is gaining on Brexit-related hopes) and the US dollar. Earlier today, Building Permits beat expectations (0.9% vs. -0.9% expected) while private sector credit (0.4% month-over-month) and private capital expenditure (1%) met expectations. Despite the reasonably good news, the currency remains weak due to concerns regarding China's economy. As the Chinese yuan continues to weaken, the Australian dollar is following suit.
AUD/USD is currently down and trading just above 0.7550. Looking at EUR/AUD, the pair is flat and currently just above 1.5630. The GBP/AUD is up and the exchange rate is currently above 1.7790.
This is a very light week for economic data releases relating to the Australian dollar. On Friday, we'll see HIA New Home Sales and AiG Performance of Manufacturing Index. Last week, the RBA’s meeting minutes suggested "considerable uncertainty" regarding future inflation and cautioned against strength in the currency.
As the currency weakens on lower rate hike expectations and slow growth, we are now bearish on the Australian dollar in the medium-term. Looking at a weekly chart, the Aussie is trading within normal conditions. Our analysis is based on various technical indicators.