The Australian dollar is getting hosed

Photo by Ulet Ifansasti/Getty Images

The Australian dollar tumbled back below US74c in overnight trade on continued strength in the US dollar, during a busy session on currency markets.

Around 7am AEST the Australian dollar fell as low as 0.7372, its lowest point for the week and 0.7% down for the session.

The greenback has continued to surge, with the US dollar index — which tracks its strength relative to the currencies of key trading partners — hitting a fresh 2018 high of 95.60. It also comes after Reserve Bank of Australia governor Philip Lowe used a speech this week to flag a short-term pullback in the RBA’s inflation forecast in its Statement on Monetary Policy, which will be released this morning.

Here’s the chart:

The RBA’s Statement on Monetary Policy will be released at 11.30am AEST, and markets will be looking carefully at revisions to not just the inflation forecast — which is likely to be revised down to 1.75% for the quarter — but also the numbers for unemployment.

Key data points in Asia today include Japanese GDP data at 10am AEST and China money supply at 6pm.

Elsewhere in currencies, the British pound continued its slide against the US dollar, weighed down by the ongoing prospect of a no-deal Brexit.

Asian markets are likely to be in a holding pattern awaiting US inflation data later tonight, which will provide further information on the likely path ahead for US interest rates.

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