The Australian dollar is drifting higher, but remains below the 77 cent level

Getty Images- Cameron Spencer

The Australian dollar drifted higher overnight, benefiting from thin trading conditions as a result of the President’s Day holiday in the United States.

But it’s still below the 77 cent level, a region that it’s struggled to overcome in recent months.

Here’s the Australian dollar scoreboard as at 8am AEDT.

  • AUD/USD 0.7682 , 0.0013 , 0.17%
  • AUD/JPY 86.88 , 0.38 , 0.44%
  • AUD/CNH 5.2675 , 0.0163 , 0.31%
  • AUD/EUR 0.7237 , 0.0019 , 0.26%
  • AUD/GBP 0.6162 , -0.0012 , -0.19%
  • AUD/NZD 1.0678 , 0.0008 , 0.07%

Whether the AUD/USD makes another attempt to break above this level of strong selling resistance is unlikely to be answered in Asia despite a reasonably busy economic calendar, particularly in Australia.

The weekly ANZ-Roy Morgan Australian consumer confidence report will be released at 9.30am AEDT with the minutes of the Reserve Bank of Australia’s (RBA) February monetary policy meeting scheduled to follow two hours later at 11.30am AEDT.

While the minutes have moved the Aussie when they’ve been released in the past, analysts don’t expect there’ll be much market reaction given traders have heard from the RBA on several occasions in the past week.

“Since the statement on monetary policy (SoMP) was released over a week ago and we have also heard from governor Lowe, the minutes are unlikely to reveal anything we don’t already know,” said Rodrigo Catril, currency strategist at the National Australia Bank.

“Essentially the bank is quite relaxed about Australia’s growth outlook and that inflation is expected to slowly return to target.”

Outside of Australia, markets will also keep an eye on the flash manufacturing purchasing managers index (PMI) from Japan that will be released at 11.30am AEDT.

Though not a major market mover in the past, as the first major industrial nation to report on activity levels for February, markets may use this report as a gauge on how the global economy is performing after a strong start to the year.

The PMI hit 52.7 in January, the highest level since mid-2014.

Later in the session, markets will also receive both services and manufacturing flash PMI readings from the eurozone, German, France and the United States, allowing traders to further gauge how the broader global economy was performing in recent weeks.

France will also release inflation figures for January while Bank of England governor Mark Carney is also scheduled to speak.

Aside from the PMI reports released in the United States, several Federal Reserve members will also be in action with Kashkari, Harker and Williams all delivering speeches overnight.

“Based on recent appearances and publications we know that Kashkari is a solid dove and has made his case for holding rates steady,” says Catril.

“Meanwhile, Harker is probably one of the most hawkish voter on the FOMC this year and Williams is somewhat in the neutral camp although early in February he noted that three hikes was a ‘reasonable perspective to have as a base case’.”

Here’s the four-hour AUD/USD chart:

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