When it comes to sustaining a move above the 77 cent level, the Australian dollar is truly living up to its nickname as the “battler” right now.
It just can’t do it, with the AUD/USD trying and failing to break resistance above this level for what is now the umpteenth time in the past few months on Wednesday.
The daily chart below underlines just how well this area has capped the Aussie in recent months.
The move in the Aussie came despite reduced odds of a RBA rate cut courtesy of yesterday’s Australian Q3 CPI report, along with another surge in iron ore prices which rose to a five-month high overnight.
Aside from technicals, the move in the Aussie overnight appears to have been driven by increased odds of a US rate hike in December thanks to a slew of stronger-than-expected US economic data.
This helped to lift US bond yields and, as a consequence, a reversal in the US dollar. Weakness in crude oil futures also didn’t help the Aussie.
As we move towards the close in New York, the AUD/USD currently buys .7649 as at 7.35am AEDT.
After a whirlwind of activity on Wednesday around the CPI release, the domestic and regional economic data slows to a crawl today, something that tends to occur at the end of each month.
Domestically, Q3 import/export prices will be release while regionally markets will receive trade data from New Zealand and industrial profits from China.
None of these will move the Aussie.
In the absence of any meaningful market-moving data, the Aussie is likely to take its cues from movements in the USD/JPY, USD/CNH and crude futures.
Later in the session, there’s likely to be some interest in the UK Q3 GP release at 7.30pm AEDT given the Brexit vote while in the US durable goods orders for September may also create some volatility for the Aussie.
Here’s the Australian dollar scoreboard, as at 7.35am AEDT.
- AUD/USD 0.7649 , 0.0004 , 0.05%
- AUD/JPY 79.93 , 0.25 , 0.31%
- AUD/CNH 5.1894 , 0.0113 , 0.22%
- AUD/EUR 0.7011 , -0.001 , -0.14%
- AUD/GBP 0.6248 , -0.0024 , -0.38%
- AUD/NZD 1.0690 , 0.0022 , 0.21%