12th June 2020 - AUD/USD bears catch a breather around one-week low under 0.6900


Good Morning,


Market Headlines

Risk sentiment worsened as a rise in reported Covid cases in some parts of the US, markets were also worrying about the Fed gloomy economic projections released yesterday. The S&P500 is down 5.9%, with risky currencies, bond yields and commodities also lower.


Currencies

US dollar index is up 0.8% on the day

EUR fell from 1.1404 to 1.1298

USD/JPY fell from 107.23 to 106.58

AUD fell from 0.6963 to 0.6843.

NZD fell from 0.6517 to 0.6414.

AUD/NZD fell from 1.0690 to 1.0636


AUD Thoughts

- AUD/USD stabilizes near 0.6840/50 after declining to eight-day low.

- Market’s risk-tone remains heavy amid fears of virus resurgence and an absence of V-shaped recovery.

- Softer than expected Aussie Consumer Inflation expectations and US-China tension added weakness into the quote.

- Risk catalysts to keep the driver’s seat amid a light calendar.


Aussie bears are cheering the pair’s declines below the mid-January top. Even so, an ascending trend line from March 19, currency around 0.6800, followed February month top near 0.6775, become the key supports to watch. Meanwhile, the pair’s pullback beyond 0.6935 could restore the bulls’ confidence to challenge 0.7000 threshold.


Event Risk Data Today

New Zealand: Although the May manufacturing PMI was still at a low level of 26.1, it is expected to lift in June as the economy opens further. Following this, markets anticipates that the food price index will be shown to have been flat in May, though measurement may be hampered by COVID-19 restrictions.


Euro Area: April Industrial Production is set to fall in April, reflecting what has arguably been the worst single month in the history of the Eurozone economy. Germany, the euro zones strongest economy, has seen industrial production decrease by 17.9% over April.


US: University of Michigan Consumer Sentiment Survey is expected to tick up to 75.0 in June - the index remains well above its GFC low of 55.3.


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