The Australian dollar is going nowhere

Image: Chris Livingston / Getty Images

The Australian dollar is going nowhere fast, sitting almost exactly where Asia left in early trade on Tuesday.

Here’s the scoreboard as at 7.35am AEDT.

  • AUD/USD 0.7602 , 0.0001 , 0.01%
  • AUD/JPY 84.3 , 0.04 , 0.05%
  • AUD/CNH 5.2233 , 0.0004 , 0.01%
  • AUD/EUR 0.7124 , 0.0001 , 0.01%
  • AUD/GBP 0.6089 , 0.0003 , 0.05%
  • AUD/NZD 1.0834 , 0.0002 , 0.02%

The AUD/USD traded in a relatively thin range of between .7587 to .7641 on Monday, a slightly surprising outcome given the flurry of major economic data released both at home and abroad during the session.

Nearly a full day after it was released, Australia’s retail sales report for February — which revealed a surprise contraction in turnover — remains the most influential factor on the Aussie at present, keeping it under pressure throughout European and North American trade.

That was probably reinforced by the release of strong manufacturing and construction data from the US overnight which exceeded market expectations.

Sliding iron ore prices, sending the benchmark spot price below the $80 a tonne level for the first time since January 10, would have done little to help the Aussie’s cause.

The benchmark price has now fallen over 16% since late February, an important consideration given it is Australia’s largest goods export by dollar value.

As seen in the hourly chart below, traders appear unwilling at present to test the lows struck in late March.

AUD/USD Hourly Chart

Turning to Tuesday trade in Asia, there’s another flurry of economic data releases scheduled, including in Australia.

International trade figures for February will be released at 11.30am AEST with Australia’s trade surplus expected to widen to $1.8 billion from $1.3 billion in January.

Before that arrives, the weekly ANZ-Roy Morgan Australian consumer confidence index will also hit at 9.30am AEST.

Later this afternoon, the Reserve Bank of Australia will announce it’s April interest rate decision at 2.30pm AEST. While no one expects that the bank will move the cash rate from 1.5%, there’s been plenty of developments since the board last met, meaning there’ll still be plenty of interest in the accompanying monetary policy statement.

This 10-second guide runs through the potential changes that may arrive.

Only hours after the RBA decision will be released, governor Philip Lowe will also speak at a RBA board dinner from 7.15pm AEST in Melbourne. There is no title for his speech, adding extra intrigue.

In Europe, markets will receive eurozone retail sales along with UK construction PMI. The latest GDT dairy auction will also be held, an event that may be of interest to AUD/NZD traders given its influence on the Kiwi.

In the US, trade figures, factory orders and revised durable goods orders for February will be released alongside the latest Empire State manufacturing index for March.

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