- The Australian dollar continues to range trade against the greenback despite strong US economic data released on Friday.
- There’s a raft of major economic data released in Australia today. Retail sales data for April is the headline act.
- Currency strategists at the Commonwealth Bank say the AUD/USD is likely to remain range-bound this week.
The Australian dollar has opened the new trading week in familiar territory, continuing to range trade against greenback despite strong US economic data released on Friday.
Here’s the scoreboard as at 8.05am in Sydney.
AUD/USD 0.7565 , -0.0001 , -0.01%
AUD/JPY 82.84 , 0.03 , 0.04%
AUD/CNH 4.8521 , 0.0062 , 0.13%
AUD/EUR 0.6486 , 0.0001 , 0.02%
AUD/GBP 0.5667 , 0.0003 , 0.05%
AUD/NZD 1.0829 , 0.0017 , 0.16%
AUD/CAD 0.9803 , 0 , 0.00%
As seen in the hourly chart below, the AUD/USD finished Friday’s session almost exactly where it started, showing limited reaction to stronger-than-expected US non-farm payrolls and ISM manufacturing data for May released during the session.
Payrolls growth and average hourly earnings both beat to the upside while the unemployment rate fell to just 3.8%, another fresh multi-decade low.
Activity levels across the US manufacturing sector also improved at a faster pace in May, according to the ISM’s latest manufacturing PMI report.
While those releases, along with some hawkish remarks from a leading US FOMC official, helped to boost US bond yields and dollar during the session, it wasn’t enough to place downward pressures on the Australian dollar which remained firmly entrenched in familiar ranges.
Turning to the session ahead, there’s a raft of major economic data released both in Australia and abroad.
Locally, Australian retail sales data for April will be released at 11.30am AEST. Economists look for an increase of 0.3% after a flat result in March.
This 10-second guide has more on what to look out for, including why some forecasters believe sales may have declined during the month.
Alongside the retail sales report, the ABS will also release company profits data for the March quarter, the latest GDP input before Australia’s national accounts are released on Wednesday.
ANZ job ads for April, along with HIA new home sales for May, will also be released.
Outside of Australia, other data highlights include Eurozone investor confidence and producer price inflation along with US factory orders and Empire State manufacturing index.
New Zealand markets will be closed for the Queen’s Birthday holiday.
“[The] AUD/USD will remain range bound this week,” said Elias Haddad, Senior Currency Strategist at the Commonwealth Bank.
“The soft patch in global economic activity, as reflected by the decline in the global manufacturing PMI, limits AUD/USD upside but favourable Australian economic conditions will underpin AUD/USD.”
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