The Australian dollar just suffered its largest slide since Brexit

Michael Hurcomb/Corbis via Getty Images
  • The Australian dollar has fallen over 2% against the greenback over the past two sessions, its largest slide since the UK Brexit vote.
  • The AUD/USD currently sits at the lowest level since December last year, extending its slide from late January to over 5%.
  • There a few major economic data releases scheduled on Monday.

The Australian dollar just suffered its largest two-day percentage decline since Brexit, falling heavily for a second consecutive session on Friday.

As seen in the scoreboard below as at 7.45am AEDT, there’s been no early bounce in early Asian trade on Monday.

AUD/USD 0.7715 , 0 , 0.00%
AUD/JPY 81.72 , -0.15 , -0.18%
AUD/CNH 4.8798 , -0.0006 , -0.01%
AUD/EUR 0.6279 , -0.0002 , -0.03%
AUD/GBP 0.5534 , -0.0002 , -0.04%
AUD/NZD 1.0686 , 0.0014 , 0.13%
AUD/CAD 1.0097 , -0.0001 , -0.01%

After plunging over 1% on Thursday, the Aussie suffered another 1% plus slide against the greenback on Friday, briefly falling to as low as .7710. It’s the lowest seen since late last year.

After breaking the uptrend that was in place since early March a session earlier, Friday’s declines saw the AUD/USD slice below both its 100 and 200-day moving averages, adding to the downward momentum seen in recent days.

Elias Haddad, Senior Currency Strategist at the Commonwealth Bank, said the Aussie’s slide was not due to just technical selling but also weaker commodity prices and ongoing uncertainty over the outlook for global trade.

“AUD/USD is down on USD strength, lower iron ore prices and global trade related uncertainty,” he says.

“[The] USD edged a bit higher during Friday‚Äôs overnight session and US 10-year Treasury yields rose by roughly 3 basis points to 2.84%, supported by favourable US economic data.”

Whatever the catalysts behind the Aussie’s move, at over 2%, the slide over the past two sessions was the largest in percentage terms since the immediate aftermath of Brexit back in late June 2016.

AUD/USD Daily Chart

Turning to the session ahead, there’s very little on the economic calendar that will interest traders, likely ensuring that sentiment and technicals will continue to dictate the ebbs and flows in the Aussie.

There’s no major data out domestically with Chinese new home prices and Japanese trade data for February the only releases of note in Asia.

Later in the session, highlights include Eurozone trade along with 3 and 6-month treasury bill auctions in the US. The latter may well garner more attention than usual given a recent lift in short-term US borrowing costs.

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