The Australian dollar is struggling to go anywhere

Matt Cardy/Getty Images
  • The Australian dollar rose modestly on Friday following the release of US Q2 GDP data.
  • US economic growth accelerated sharply, although market expectations were high heading into the release.
  • The data calendar is quiet in Asia today, hinting that movements in the offshore traded Chinese yuan will once again be influential.

The Australian dollar remains choppy and range-bound, managing to eke out modest gains on Friday against the greenback and most of the major crosses.

Here’s the scoreboard as at 7.50am AEST.

AUD/USD 0.7397 , -0.0003 , -0.04%
AUD/JPY 82.06 , 0.03 , 0.04%
AUD/CNH 5.0468 , 0.0062 , 0.12%
AUD/EUR 0.6345 , 0.0009 , 0.14%
AUD/GBP 0.5640 , -0.0002 , -0.04%
AUD/NZD 1.0884 , 0.0016 , 0.15%
AUD/CAD 0.9665 , -0.0006 , -0.06%

And here’s a hourly chart of the AUD/USD, providing a visual indicator on what’s been happening with the Aussie recently: nothing much.

Investing.comAUD/USD Hourly Chart

The story of Friday’s session was modest US dollar weakness, sparked by the release of US GDP data for the June quarter.

The report came in largely in line with expectations with growth expanding at the fastest pace since 2014.

However, given that whisper numbers circulating ahead of the release were significantly higher, and the largely temporary factors that drove the latest improvement, it saw US bond yields decline, dragging the US dollar down as a consequence.

“Consumers and exports led the gains during the quarter, but with soybeans leading the rise in exports (+9.3%) and tax cuts behind the consumer, the sense of pay back in Q3 took some of the gloss off the impressive numbers,” said Rodrigo Catril, Senior FX Strategist at the National Australia Bank.

“The GDP figures [saw the] 10-year yield drop 3 basis points to 2.95%, before closing the session at 2.954%.

“After threatening to climb above 95 ahead of the data release, the DXY shadowed the move lower in US yields and ended the day at 94.68.”

The modest weakness in the greenback helped push the AUD/USD back above the 74 cent level after trading flat-to-lower for most of the session.

Turning to the day ahead, there’s absolutely nothing on the economic data calendar in Asia that will interest traders, likely ensuring the gyrations in the offshore traded Chinese yuan will continue to influence movements in the Aussie.

The calendar does perk up a little in the second half of the session with UK consumer credit, Eurozone consumer confidence, German CPI, along with pending home sales and Dallas Fed manufacturing survey from the United States, the headline acts.

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