The Australian dollar is currently stable. The currency is flat against most major currencies including the US dollar, the euro and the British pound. Yesterday, the Australian dollar ended the day slightly lower. While the currency was down sharply at one point, fears of US military action in Syria fell after the US airstrikes against the country did not take place.
Turning to recent news and data, investment lending for homes and February home loans were both in contraction territory. While home loans were ahead of estimates, the figures suggest a continued deterioration in the country's real estate sector. While domestic data has been underwhelming, the Australian dollar remains supported thanks to recent strength in industrial commodity prices and strength in the Chinese yuan. Looking at USD/CNH, the offshore Chinese yuan remains below 6.30. Our short-term outlook on the Australian dollar is neutral, while our medium-term outlook remains bearish.
AUD/USD is flat today and trading just above 0.7750. EUR/AUD is flat and trading above 1.5940. GBP/AUD is flat and trading above 1.8280.
Looking at economic data from Australia this week, we'll see sentiment data and housing investment numbers. The AiG performance of construction index accelerated from previous figures (57.2 vs. 56 previously). NAB business confidence for March (7 vs 12 expected) was significantly below estimates. Westpac consumer confidence (-0.6% vs. 0.2% previous) decelerated from previous figures. RBA Governor Philip Lowe stated that rates are more likely to stay on hold. Consumer inflation expectations for April (3.6% vs. 3.7% prior), February investment lending for homes (0.5% vs. 1.4% prior) and February home loans (-0.2% vs. -0.6% expected) decelerated from previous figures. Last week, the RBA kept rates on hold.
As the Australian dollar trades sideways, we are now neutral on the currency. 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 runs out of steam, 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.