17th September 2021 - AUD/USD drops to multi-week lows below 0.7300 on broad USD strength

Market Headlines

Bond yields and the US dollar rose following strong US retail sales data. The S&P500 is down 0.2% after paring deeper losses. US 2yr treasury yields rose from 0.21% to 0.22%, while the 10yr yield rose from 1.30% to 1.35%. Commodities, Brent crude oil futures rose 0.3% to $76, copper fell 3.2%, gold fell 2.2%, and iron ore fell 6.9% to $106 – a 14-month low (for a total decline of 58% since May).

Overnight Currency Range

AUD/USD 0.7274 0.7348

EUR/USD 1.1750 1.1820

GBP/USD 1.3765 1.3852

USD/JPY 109.21 109.83

NZD/USD 0.7059 0.7143

USD/CAD 1.2617 1.2700

USD/CNH 6.4256 6.4543

AUD/JPY 79.71 80.36

AUD/NZD 1.0280 1.0319

AUD Thoughts

A very bare economic data calendar to finish out the week with moves in Asia likely to take their lead from Asian stock performance and the commodity price move lower. AUD/USD traded in a softer 0.7274/.7348 range overnight with demand expected ahead of 0.7250/60 while supply should materialise as we approach 0.7400.

Event Risk Data Today

New Zealand: The return of COVID-19 restrictions is likely to result in a weaker manufacturing PMI in August.

Euro Area: The final release of the CPI for August is forecast by the market to be at or near the initial estimate (market f/c: 3.0%yr).

UK: The August retail sales report is expected to show a rotation from goods to recently-reopened services (market f/c: 0.5%).

US: Following consumer sentiment’s Delta-driven drop in August, September’s University of Michigan sentiment report is expected to show a modest partial reversal (market f/c: 72).

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