Global sentiment was relatively positive with US equities closing of the month in positive territory (S&P500 up 0.8%). Commodities, Brent crude futures gained 0.8% to $43.50, copper dropped 1.6%, iron ore was unchanged at $110.65, and gold rose 1.0%.
EUR retraced lower from 1.1909 (a two-year high) to 1.1762.
USD/JPY bounced off a five-month low of 104.19 to 106.05.
AUD gap-down near 0.7130, keeps Friday’s pullback from 0.7228 (18 month high)
NZD came off a seven-month high of 0.6717 to 0.6623.
AUD/NZD ranged between 1.0750 and 1.0785.
- AUD/USD kick-starts the week with a gap-down near 0.7130, keeps Friday’s pullback from 0.7228.
- Victoria’s “state of disaster” weighs on the quote following a heavy rise in the pandemic cases.
- US Dollar bounced off two-year lows despite no agreement over fiscal stimulus, mixed US data.
Looking forward, month-start activity numbers and TD Securities Inflation for Australia will precede China’s Caixin Manufacturing PMI to offer immediately to the pair traders. However, major attention will be given to the headlines concerning the virus and the US fiscal package agreement. Forecasts suggest China’s private Manufacturing PMI to rise from 51.2 to 51.3. Though, bulls may witness a positive surprise considering upbeat NBS Manufacturing PMI from the dragon nation, which in turn could help the AUD/USD to ignore the recent pullback.
The 10-day exponential moving average (EMA) near 0.7125 offers immediate support ahead of 0.7065/60 rest-zone, comprising the high of June 10 and July 24, to keep the bulls hopeful.
Event Risk Data Today
AU: The AiG PMI index rose by 9.9ppts in June; but the Melbourne lockdown will hit the July reading (prior: 51.5). TD Securities Inflation for Australia jumped post-lockdown but uncertainty remains around if the gains can be sustained (prior: 0.7%). Similarly, ANZ job ads surged 42.0% as the economy reopened, but this upward trend may be reversed on the Vic lockdown.
Asia: Markit manufacturing PMIs (Japan, Korea, India, Malaysia and Taiwan)
CH: The Caixin PMI July (prior and market f/c: 51.2).
EU: The Eurozone July Markit manufacturing PMI
US: Manufacturing activity (July Markit PMI - prior and market f/c: 51.3; July ISM – prior: 52.6, market f/c: 53.6). Construction spending is set to turn positive for the first time since COVID-19 began, rising from -2.1% to 1.0% in June. FOMC's Bullard (02:30AEST), Barkin (03:00AEST) and Evans (04:00AEST) will speak today.