The Australian dollar has kicked off the new trading week just below the US80c level

Photo by Anthony Au-Yeung/Getty Images

The Australian dollar has opened the new trading week just below the 80 US cent level after enduring a topsy-turvy session on Friday.

Here’s the scoreboard as at 8am AEST.

AUD/USD 0.7982 , -0.0004 , -0.05%
AUD/JPY 88.32 , -0.01 , -0.01%
AUD/CNH 5.3761 , -0.0014 , -0.03%
AUD/EUR 0.6792 , -0.0008 , -0.12%
AUD/GBP 0.6076 , -0.0006 , -0.10%
AUD/NZD 1.0633 , 0.0009 , 0.08%
AUD/CAD 0.993 , 0.0005 , 0.05%

After falling to as low as .7937, the AUD/USD rebounded strongly in the second half of Friday’s trading session, thanks largely to the release of US economic data that came in marginally below market expectations.

The advanced US GDP Q2 estimate increased by 2.6% on a seasonally adjusted annual rate basis — marginally undershooting expectations for a 2.7% expansion — while Q1’s reading was revised down 0.2 percentage points to just 1.2%.

Those outcomes, along with a soft US wage reading for the June quarter, saw US bond yields decline, undermining the US dollar as a consequence.

That ensured the AUD/USD rebounded strongly late in Friday trade, briefly moving back above the 80 US cent level before eventually closing the session at .7986.

The 5-minute chart below shows the Aussie’s initial slide, and its eventual surge, on Friday.

AUD/USD 5-Minute Chart

Looking ahead to Monday’s trading session, there’s plethora of local and regional data releases scheduled, although it’s debatable how much impact they will have on movements in the Aussie.

Domestically, traders will receive new home sales and the latest Melbourne Institute inflation gauge at 11am AEST along with private sector credit figures for June at 11.30am AEST.

Of all the local releases, most interest will be on the private sector credit report, especially the housing credit figure. Housing credit has consistently risen at a fastest pace than business and personal credit growth, meaning the only way this release will surprise today will be if that trend is not repeated.

Regionally, markets will also receive manufacturing, non-manufacturing and steel industry Purchasing Manager Indices (PMIs) for July at 11am AEST. The manufacturing PMI is expected to fall to 51.6 from 51.7, although this figure has consistently outperformed market expectations so far in 2017.

There are no forecasts for the non-manufacturing PMI, although it usually prints significantly higher than the manufacturing reading.

As with the Australian private sector credit report, the only way these reports will create a lasting impact on the Aussie will be if the recent trend is not replicated today.

Later in the session, Eurozone consumer price inflation and unemployment are the undisputed highlights.

Markets will also receive unemployment and inflation figures from Italy, German retail sales and UK consumer credit, along with Chicago PMI, pending home sales and Dallas Fed manufacturing index from the US.

It’s unlikely that these releases will create too much movement in the Aussie with many traders will likely have an eye on bigger market events later in the week.

In Australia, markets will receive the latest RBA monetary policy decision for August on Tuesday along with updated growth, inflation and unemployment forecasts from bank in its latest Statement on Monetary Policy on Friday.

Retail sales, international trade and building approvals data will be also released during the week.

Internationally, the most important data release will be the US non-farm payrolls report for July on Friday, particularly the change in average hourly earnings.

See also: Australian diary — everything you need to know about the week ahead for markets

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