18th June 2019 - AUD/USD struggles near multi-month lows, just above mid-0.6800s

Good Morning,

Market Headlines

• US-China trade tensions continue to weigh on the Australian Dollar.

• Dismal US data-led intraday uptick turns out to be rather short-lived.

• Today’s RBA policy meeting minutes eyed for some short-term impetus.


- The US dollar index is unchanged on the day.

- EUR round-tripped from 1.1215 to 1.1247 and back.

- USD/JPY ranged sideways between 108.50 and 108.70.

- AUD extended a five-day decline, from 0.6870 to 0.6849 – the lowest since January.

- NZD slipped from 0.6515 to 0.6490.

- AUD/NZD fell from 1.0570 to 1.0538.

AUD Thoughts

AUD/USD pair held on to its offered tone through the early North-American session and remained within striking distance of multi-month lows set on Friday.

After an early uptick to an intraday high level of 0.6885, the pair met with some fresh supply and drifted into the negative territory for the fourth consecutive session on Monday.

The pair did get a minor lift amid a modest US Dollar weakness following the disappointing release of Empire State Manufacturing Index, albeit once again failed to capitalize on the move.

Sentiment surrounding the China-proxy Australian Dollar remained fragile amid growing concerns over a further escalation in the trade tensions between the world’s two largest economies.

Hence, a follow-through weakness, led by some technical selling below multi-month lows near the 0.6860 region, remains a distinct possibility ahead of today’s RBA policy meeting minutes.

The key focus, however, will remain on the latest FOMC monetary policy update, scheduled to be announced on Wednesday, which will help investors to determine the pair’s near-term trajectory.

Event Risk Data Today

• NZ: Westpac Q2 consumer confidence follows a fall in Q1 to almost a six-year low.

• Australia: The RBA minutes will provide further information surrounding the Board’s decision to lower the cash rate at the June meeting. RBA Head of Financial Stability Kearns speaks in Canberra, 9:15 am. Q2 AusChamber-Westpac survey is released.

• China: May new home prices data is released.

• Euro Area: ECB President Draghi delivers an introductory speech at the ECB Sintra conference. He also participates in a policy panel alongside BOE Governor Carney and former Fed Vice Chair Fischer.

• US: May housing starts and building permits are expected to post moderate gains with stabilisation now evident in residential construction.

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