The Australian dollar rally stalls again

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In Pictures Ltd./Corbis via Getty ImagesDrunk men lying amidst empty beer cans, during the annual Birdsville races.
  • The Australian dollar followed a predictable pattern on Monday, lifting in Asia before falling towards the close.
  • There was no clear catalyst to explain the Aussie’s abrupt reversal. US markets were shut for the Presidents Day holiday.
  • US markets resume trade today. The economic calendar also picks up, although most of the major events will arrive later in the week.

The Australian dollar followed a familiar path on Monday, lifting in Asian trade before giving back ground towards the close.

Here’s the scoreboard at 7.55am in Sydney on Tuesday.

AUD/USD 0.7132 , -0.0007 , -0.10%
AUD/JPY 78.87 , 0.10 , 0.13%
AUD/CNH 4.8303 , 0.004 , 0.08%
AUD/EUR 0.6303 , -0.0014 , -0.22%
AUD/GBP 0.5516 , -0.0014 , -0.25%
AUD/NZD 1.0404 , 0.0023 , 0.22%
AUD/CAD 0.9442 , -0.0013 , -0.14%

With little on the economic calendar and most US markets closed for the President’s Day holiday, the session was predictably dull.

After starting the week at .7139, the AUD/USD rose steadily during Asian trade, taking its cues from movements in the Chinese yuan and stocks that rallied belatedly on renewed optimism over US-Sino trade negotiations.

However, when Asia went home the Aussie dollar rally ran out of puff, seeing it slide into negative territory towards the close. Trade volumes were thin given many investors were sidelined by the closure in US stock and bond markets.

Some analysts say the Aussie was knocked lower by renewed concerns about the prospect of further US tariffs, this time on car imports. Others cited simmering geopolitical tensions between Australia and China as a reason for the Aussie’s slide.

It may have been caused other factors or no real reason at all.

With an hour left to trade, the AUD/USD sits at .7132.

Investing.comAUD/USD Hiurly Chart

Like the Aussie, the movements in the major crosses were also muted on Monday.

Turning to the session ahead, activity looks set to pickup with a busier data calendar and the return of US markets following a long weekend.

In Australia, the RBA will release the minutes of its February monetary policy meeting at 11.30am AEDT.

Given we’ve heard so much from the RBA since the start of the month, it’s hard to see the minutes offering anything major that wasn’t already known. However, that’s not to say it will be a non-event — the minutes have surprised markets in the past.

Before the minutes are released, the latest ANZ-Roy Morgan Australian consumer confidence report will also be released. It’s unlikely to generate any interest from traders.

Later in the session, the main data highlights are UK unemployment and wage growth, Eurozone current account and construction output, German investor sentiment along with the NAHB home builder sentiment survey in the United States.

For New Zealand dollar traders, the latest GDT Dairy auction will also take place.

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