8th September 2020 - AUD/USD: Awaits fresh clues to carry weakness below 0.7300


Good Morning,

Market Headlines

Markets were mostly contained during the US holiday, part from the GBP which fell amid news that the UK government is intending to change the Brexit withdrawal agreement. Commodities, Brent crude oil futures fell 1.5% to $42.00 (a one-month low) amid weaker demand (indicated by Saudi price cuts to importers in Asia and the US), copper rose 0.4%, iron ore rose 0.5% to $129.60, and gold fell 0.2%.

Currencies

AUD/USD: 0.7272 – 0.7289

EUR/USD: 1.1812 – 1.1849

GBP/USD: 1.3139 – 1.3238

USD/JPY: 106.14 – 106.31

USD/CAD: 1.3077 – 1.3115

NZD/USD: 0.6693 – 0.6710

AUD/JPY: 77.20 – 77.41

AUD/NZD: 1.0859 – 1.0876

AUD Thoughts

- AUD/USD remains pressured inside a choppy range between 0.7275 and 0.7280 as Tuesday’s Asian session begins.

- Geopolitical tension between China and India joins the Sino-US tussle to weigh on the risk-tone.

-Aussie NAB Business Confidence, US NIFB Business Optimism Index, Consumer Credit Change to decorate the calendar.


NAB Business Confidence and Business Conditions for Australia, expected -22 and +2 versus -14 and 0 respectively, will offer immediate direction ahead of the US second-tier data that are likely to print mixed results. However, the market players will be more concerned with the risk events and how the American traders respond to them for near-term direction.

An area between 0.7230 and 0.7300, comprising 21-day and 10-day SMAs respectively, limits the pair’s immediate moves amid bearish bias.

Event Risk Data Today

AU – August business confidence and conditions survey will begin to capture the effects of Melbourne’s second shutdown (prior: 0). Weekly payrolls for the week ending 22 Aug will also be affected by developments in Melbourne as well as the recent softening in momentum in NSW.

EU – Q2 final GDP will confirm the traumatic effects of COVID-19 on the economy (prior: -12.1%, market f/c: -12.1%).

JP - Q2 GDP reflects COVID-19’s massive blow to activity. Q2’s contraction is now predicted to be larger than first estimated (first estimate: -7.8%, market f/c: -8.1%). The current account balance is expected to rebound from the smallest monthly surplus in five years in June of 167.5 to 1872.0 in July.

US: Uncertainty driven by the second-wave of cases in Jul/Aug is expected to keep Aug NFIB small business optimism level (prior: 98.9, market f/c: 98.9). The easing of restrictions should see a recovery in Jul consumer credit (prior: 8.948, market f/c: 12.800)

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