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The Australian dollar closed at a 7-year low last week and could go even lower today

Photo: Getty Images

It’s been another weak opening for the Australian dollar on Monday morning, continuing to slide having closed at the lowest level since March 2009 on Friday.

Here’s the current Australian dollar scorecard as at 8.15am AEDT.

  • AUD/USD 0.6836 , -0.0031 , -0.45%
  • AUD/JPY 79.8 , -0.58 , -0.72%
  • AUD/CNH 4.5145 , -0.0277 , -0.61%
  • AUD/EUR 0.6250 , -0.0041 , -0.65%
  • AUD/GBP 0.4793 , -0.0021 , -0.44%
  • AUD/NZD 1.0631 , 0.0027 , 0.25%

As the hourly chart from Thomson Reuters reveals below, the Aussie briefly flirted with the near 7-year low of .6824 struck on Friday evening, hitting an intraday level of .6831 before bouncing modestly in recent trades.

Thomson Reuters

According to Elias Haddad, currency strategist at the CBA, the recent bout of weakness may persist in the week ahead.

“AUD/USD is vulnerable to more downside this week,” wrote Haddad in his Monday morning note.

“China’s December economic activity data batch on Tuesday (retail sales, industrial production and fixed asset investments) and Q4 GDP will likely remain unimpressive. Tuesday’s release of the IMF’s World Economic Outlook update may also generate some AUD volatility.”

With little in the way of market moving data in Asia today — there’s the TD-MI inflation gauge and new motor vehicle sales out in Australia along with Chinese house price data at 12.30pm AEDT — it’s likely that the performance of Chinese markets will yet again determine how the Australian dollar performs today.

The sell off in Chinese stocks, along with renewed weakness in the offshore traded yuan, coincided with the sharp risk reversal seen during Asian trade on Friday.

Should a similar scenario develop today, it will likely heap further pressure on risk assets, including the Australian dollar.

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