25th August 2020 - AUD/USD: Struggles below 0.7200 despite broad risk-on mood

Good Morning,

Market Headlines

US equity sentiment remained buoyant overnight, supported by vaccine developments, as well as market expectations that Fed Chair Powell’s speech may signal further easing. The S&P500 is up 0.9% to a fresh record high. For Commodities, Brent oil futures rose 1.5% to $45.00, copper rose 0.2%, iron ore fell 1.5% to $124.10, and gold fell 0.8%.


AUD/USD: 0.7153 – 0.7203

EUR/USD: 1.1776 – 1.1849

GBP/USD: 1.3054 – 1.3147

USD/JPY: 105.70 – 105.98

USD/CAD: 1.3135 – 1.3238

NZD/USD: 0.6523 – 0.6565

AUD/JPY: 75.79 – 76.15

AUD/NZD: 1.0960 – 1.1002

AUD Thoughts

- AUD/USD attempts recovery from 0.7153 after flashing third consecutive day under 0.7200 mark.

- Virus vaccine/treatment optimism gained support from US COVID-19 figures.

- Sino-American tussles continue with TikTok suing Trump administration.

- No major data/events on the calendar, virus headlines, chatters over Jackson Hole Symposium will be the key.

An ascending trend line from August 03, currently around 0.7140, challenges the bears ahead of 0.7065/60 region comprising June high and July 24 low. Meanwhile, a daily closing beyond 0.7200 will be necessary to convince buyers to attack the early-month top surrounding 0.7240.

Event Risk Data Today

AU – Weekly jobs and wages is likely to exhibit an emerging loss of momentum due to the Melbourne lockdown

DE – Final Q2 GDP

DE – August IFO survey is on a clear upward trend as the virus continues to be reined in (prior: 90.5, market f/c: 92.2).

US – Q2 house price index captures data with a lag, May result of -0.3% reflected contracts signed under stay-at-home orders in Mar/Apr; prices are forecast to lift 0.3% in June

US – August consumer confidence is improving, but policy gridlock remains a material risk (prior: 92.6, market f/c: 93.0)

US – August Richmond Fed manufacturing (prior and market f/c: 10)

US – July new home sales point to a return to normal conditions for home demand, aided by low mortgage rates. Sales are seen rising from 775k to 785k in July.