The Australian dollar is charging higher

JAIME REINA / AFP / Getty Images
  • The Australian dollar rallied by over 1% against the US dollar on Monday, propelled higher by strong economic data and renewed weakness in the greenback.
  • The Aussie’s gain against the greenback was the largest since March 21, and left the AUD/USD at the highest level since late April.
  • It’s a busy economic calendar today, headlined by major releases in Australia. The RBA will also announce its June interest rate decision.

The Australian dollar is on the charge, hitting the highest level since late April on the back of strong economic data and renewed US dollar weakness.

Here’s the scoreboard as at 7am in Sydney.

AUD/USD 0.7646 , 0.008 , 1.06%
AUD/JPY 83.96 , 1.15 , 1.39%
AUD/CNH 4.8960 , 0.0501 , 1.03%
AUD/EUR 0.6537 , 0.0052 , 0.80%
AUD/GBP 0.5743 , 0.0079 , 1.39%
AUD/NZD 1.0873 , 0.0061 , 0.56%
AUD/CAD 0.9886 , 0.0083 , 0.85%

The Aussie finished higher across the board, boosted by stronger-than-expected retail sales in April and business indicators for the March quarter.

The US dollar also came under selling pressure, undermined by lessening concern over political risks in Europe. The inability of the greenback to hold onto gains following the release of strong jobs data on Friday may have also contributed to technical selling among traders.

Combined, that was enough to offset a mixed performance in commodity prices, seeing the AUD/USD finish Monday’s session with a gain of 1.01%, the largest percentage gain since March 21.

AUD/USD Hourly Chart

Turning to the session ahead, a raft of Australian economic data is scheduled today, headlined by the release of Australian balance of payments and government expenditure figures for the March quarter, the last of Australia’s Q1 GDP inputs before the national accounts are released on Wednesday.

In the balance of payments report, net exports are expected to contribute a hefty 0.5 percentage points to quarterly real GDP growth, completely reversing weakness seen in the final quarter of last year.

The current account deficit is also expected to narrow, falling to $9.9 billion from $14 billion in the prior quarter.

“[The] Q1 net export data is expected to show a strong contribution to tomorrow’s Q1 real GDP growth outcome, and confirm that Australia’s current account deficit will remain around a relatively low 2.0% of GDP,” said Richard Grace, Chief Currency Strategist at the Commonwealth Bank.

“Both factors are supportive for AUD.”

Both reports will arrive at 11.30am AEST.

Before they hit, the Ai Group will release Australia’s Performance of Services Index (PSI) for May at 9.30am AEST. Weekly Australian consumer confidence data from ANZ will also arrive alongside the PSI report.

Rounding off a busy session for Australian data and economic events, the RBA will also announce its June interest rate decision at 2.30pm AEST.

The cash rate is unilaterally expected to remain at 1.5% for a 20th consecutive meeting, meaning all eyes will once again be on the accompanying monetary policy statement.

This 10-second guide has more on what to look out for in the statement.

Outside of Australia, regional highlights today include services PMI data from Japan and China.

The services PMI deluge continues later in the session will a raft of figures from Europe, the UK and US scheduled.

Other highlights today include Eurozone retail sales, the latest GDT dairy auction (often a catalyst for New Zealand dollar moves) and JOLT job openings from the United States.

On the central bank front, Jon Cunliffe of the Bank of England and Jens Weidmann, President of Germany’s Bundesbank, are both scheduled to deliver speeches.

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