The Australian dollar is mostly higher today. AUD is currently the strongest against the Canadian dollar and the US dollar. While most commodity prices are faring poorly today, the Australian dollar is benefiting from improving risk sentiment. Looking at global equity markets, Hong Kong's Hang Seng Index is currently higher while futures point to a strong open for the S&P 500 as well. Last week, we wrote that we were likely to downgrade our medium-term outlook on the currency to neutral. Following recent strength, this is no longer the case, and bullish momentum remains intact for now. Note that today is a public holiday in Australia (Labour Day), and trading volumes are limited as a result. Our short-term outlook remains neutral, while our medium-term outlook remains bullish.
AUD/USD is up today and trading just above 0.7860. EUR/AUD is flat and trading above 1.5670. GBP/AUD is down slightly and trading above 1.7630.
Looking at economic data relating to the Australian dollar this week, we'll see home lending and consumer confidence figures. Tomorrow, we'll see home loans, investment lending for homes and the NAB business conditions survey. RBA Assistant Governor Bullock will also be speaking. On Wednesday, we'll see Westpac consumer confidence. RBA Assistant Governor Kent will deliver a speech on that day as well. On Thursday, we'll see consumer inflation expectations and the monthly RBA bulletin. On Friday, we'll hear from RBA Assistant Governor Debelle. Last week, Q4 GDP growth came in below expectations.
As the Australian dollar runs out of steam, we are downgrading the currency to neutral. Looking at a daily chart of the Aussie, the currency is trading within a normal range. This is based on various technical indicators.
As the Australian dollar rebounds, we are now bullish 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.