The Australian dollar just fell to its lowest level in 2018

FRANCOIS-XAVIER MARIT/AFP/Getty Images
  • The Australian dollar fell heavily on Monday, resuming the selloff seen in recent weeks.
  • The AUD/USD fell to the lowest level in 2018 during the session, weighed down by geopolitical risk and month-end window dressing.
  • It is a busy calendar today despite holidays in many nations, headlined by the RBA May interest rates decision and a speech from RBA governor Philip Lowe.

The Australian dollar fell heavily on Monday, sliding to the lowest level this year against the greenback.

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

AUD/USD 0.7529 , -0.0052 , -0.69%
AUD/JPY 82.28 , -0.25 , -0.30%
AUD/CNH 4.7539 , -0.0297 , -0.62%
AUD/EUR 0.6232 , -0.0014 , -0.22%
AUD/GBP 0.5469 , -0.0024 , -0.44%
AUD/NZD 1.0699 , 0.0016 , 0.15%
AUD/CAD 0.9662 , -0.0066 , -0.68%

After a small bounce on Friday, the selloff in the Aussie resumed with force to start the trading week, weighed down by month-end window dressing and renewed geopolitical concerns in the Middle East.

The Aussie’s slide began in Asia before gathering speed in European trade.

Softer-than-expected German retail sales, coupled with weak inflation data from Italy and Germany, acted to drag the Euro lower, helping to boost the US dollar against all major currencies, including the Australian dollar.

The greenback was also supported by news that core PCE inflation, the Fed’s preferred measure of gauging price pressures, increased by 1.9% in the year to March, leaving it just shy of the Fed’s 2% inflation target.

After a sharp lift in recent weeks, the US dollar was also aided by month-end window dressing. As a laggard in April, this, along with a noticeable deterioration in investor risk appetite in North American trade, likely contributed to the Aussie’s weakness on Monday.

The AUD/USD finished at .7531, recovering modestly after falling to the lowest level since December 2017 earlier in the session.

It shed 2% in April — its third consecutive monthly decline in a row — extending its slide from late January to 7.5%.

AUD/USD Daily Chart

Turning to the day ahead, it looks set to be a busy one for traders even with many markets closed for May Day holidays.

In Australia, markets will receive manufacturing PMI and house price data for April at 8.30am and 10am AEST respectively.

That will be followed later in the day by the Reserve Bank of Australia’s May interest rate decision at 2.30pm AEST.

No change in interest rates is expected, although there’s likely to be plenty of interest on the bank’s monetary policy statement ahead of the release of updated economic forecasts from the RBA on Friday.

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

Doubling up on the RBA action, governor Philip Lowe will also speak from 7.20pm AEST. There’s no title for his speech to the RBA Board dinner, adding an extra degree of uncertainty for traders.

Outside of Australia, data highlights include manufacturing PMI from Japan, Canadian GDP, UK consumer credit along with manufacturing PMI and construction spending figures from the United States.

The latest GDT Dairy auction will also take place — an event that will attract the interest of New Zealand dollar traders.

Chinese, German and French markets, along with large numbers of other nations, will be offline for May Day holidays.

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