The Australian dollar doesn't know which way to go

SAM PANTHAKY/AFP/Getty Images

The Australian dollar fell marginally in overnight trade, failing to receive a boost from strong gains in risk assets across European and US markets.

In reality, having gained over 1% in Asia, the rally all but ran out of puff given an absence of market-moving events during the overnight session, including from the EU leaders summit in Brussels.

“AUD/USD was relatively stable overnight in the absence of important global economic data,” said Joseph Capurso, senior currency strategist at the Commonwealth Bank. “The AUD remains slightly above Friday’s low point, helped higher by increases commodity prices and equity markets.”

After trading up to as high as .7415 in European trade, the AUD/USD tumbled to as low as .7340 before climbing higher yet again into the New York close.

It eventually finished the session buying .7387. As at 7.45am AEST, it currently fetches .7381.

AUD/USD 5-Minute Chart

Looking ahead to Wednesday trade in Asia, it’s reminiscent of the movie “Groundhog Day”. There’s no major data events to speak of.

In the absence of hard economic data to dictate direction, something that would unlikely move the Aussie anyway given the continued focus on the UK Brexit, Capurso believe markets will be paying close attention to the second day of the EU leaders summit, something that will resume mid-afternoon in Sydney.

“We expect upside in AUD and most AUD crosses to remain limited as the market focus remains on the implications of the UK’s vote to leave the EU,” suggests Capurso.

“The lack of any important fresh economic data today will keep the focus on the UK and the global implications. A focus for markets over the coming days should be the EU leaders’ summit to discuss Brexit.”

Beyond the summit in Brussels, markets will also receive US personal incomes and spending data for May, including the all-important PCE core inflation print.

Here’s the Aussie dollar scoreboard, as at 7.45am AEST.

  • AUD/USD 0.7381 , -0.0006 , -0.08%
  • AUD/JPY 75.83 , -0.06 , -0.08%
  • AUD/CNH 4.9324 , -0.0046 , -0.09%
  • AUD/EUR 0.6669 , -0.0005 , -0.07%
  • AUD/GBP 0.5538 , 0.0002 , 0.04%
  • AUD/NZD 1.0470 , -0.0005 , -0.05%

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