Rising US jobless claims and simmering trade tensions weighed on global sentiment overnight, US equities also retreating with the Nasdaq reaching a 2 week low. On the Commodities, Brent crude futures dropped 2.1% to $43.35, copper off 0.1%, iron ore up slightly by 0.2% to $110.85, and gold rose 1.4%.
AUD/USD: 0.7091 – 0.7132
AUD/EUR: 0.6113 - 0.6179
EUR/USD: 1.1540 – 1.1627
GBP/USD: 1.2674 – 1.2759
USD/JPY: 106.71 – 107.22
USD/CAD: 1.3352 – 1.3427
NZD/USD: 0.6626 – 0.6690
AUD/JPY: 75.74 – 76.70
AUD/NZD: 1.0690 – 1.0725
Sellers attack 0.7100 as risk-aversion intensifies
AUD/USD consolidates the latest declines from 0.7138 after snapping the four-day winning streak.
Downbeat NAB Business Confidence, federal budget announcements mix with Wall Street’s first red in five days.
Escalations in the US-China tension, rising virus numbers and record low US TIPS threaten market sentiment.
Looking forward, the first readings of the Preliminary Merchandise Trade for July will be the immediate catalyst to watch. Forecasts suggest the headline Manufacturing PMI extend recoveries from 51.2 to 53.6 while Services PMI may rise to 53.2 versus 53.1 earlier. It should, however, be noted that the qualitative factors like virus numbers, headlines concerning the US fiscal plan and Sino-American tension will have a higher say in the AUD/USD moves.
Not only a clear break below 0.7100 threshold but tops marked in July 2019 and June 2020, respectively around 0.7085 and 0.7065, become necessary for the bears to re-enter and aim for 0.7000 psychological magnet. On the other hand, an upside clearance of 0.7150 will refill the bull’s bike to ride towards 0.7200 mark.
Event Risk Data Today
AU - Preliminary Merchandise Trade
UK – June Retail Sales
Eurozone – July Manufacturing, Services and Composite PMI’s
US – US July Manufacturing, Services and Composite PMI’s
US – June New Home Sales