The Australian dollar is sliding

Christian Petersen/Getty Images

The Australian dollar continued to push lower in overnight trade, largely as a result of renewed US dollar strength.

Here’s the scoreboard as at 7am AEST.

AUD/USD 0.8029 , -0.0029 , -0.36%
AUD/JPY 87.82 , 0.49 , 0.56%
AUD/CNH 5.2501 , -0.014 , -0.27%
AUD/EUR 0.6718 , -0.0006 , -0.09%
AUD/GBP 0.6096 , -0.0036 , -0.59%
AUD/NZD 1.1064 , -0.0043 , -0.39%
AUD/CAD 0.9719 , -0.0063 , -0.64%

After reversing hard in the second half of Friday’s trading session, the Aussie continued to lose ground against the US dollar on Monday, hitting a low of .8016 before bouncing into the New York close.

Relief over a moderation in tensions on the Korean peninsula, along with optimism that Hurricane Irma was unlikely to cause widespread and prolonged disruption to the US economy, both acted to the underpin the greenback during the session.

The dollar also found support from a steep reversal in the Chinese yuan which weakened sharply after surging to a multi-year high in Friday. That move saw the US dollar rally across the board in Asian trade, something that continued throughout the remainder of the session.

Renewed speculation about the prospect of US tax reforms, along with cautious remarks from ECB policymakers on the implications of recent euro strength, were other factors that worked in the US dollar’s favour.

As a result, the greenback managed to claw higher during the session on the back of modest short covering, undermining the Australian dollar as a consequence.

AUD/USD 30-Minute Chart

In the absence of any major market moving data in Asia, fluctuations in the Aussie today will likely be driven by movements in Chinese commodity futures and the Chinese yuan, continuing the pattern of Monday.

There is a smattering of data releases scheduled, although they’re unlikely to generate much movement in the Aussie.

In Australia, the weekly ANZ-Roy Morgan consumer confidence index will be released at 9.30am AEST. That will be followed two hours later by the National Australia’s Bank’s monthly business survey.

While the latter has the potential to be market moving, with strong readings on confidence and conditions already largely factored in, one suspects that it would have to take an unexpected decline in both measures to generate a reaction in the Aussie.

Outside of Australia, the Asian data calendar has few releases that will be of interest to traders.

Later in the session, data highlights include UK CPI along with small business optimism, JOLTS job survey and weekly crude oil inventory figures from the API in the US.

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