9th February 2021 - AUD/USD rises to weekly highs above 0.7700

Good Morning,

Market Headlines

In Wall Street, the Dow Jones is up by 0.42%, and the Nasdaq gains 0.49%. Gold is rising 1.35% and crude oil up 1.80%; the WTI barrel that trades at the highest level in a year at $57.90. The US dollar failed to hold to gains. The DXY peaked during the American session at 91.23 and then turned to the downside, bottoming at 90.89, a six-day low. The reversal in US bond yields contributed to the bounce in the USD. The 10-year yield is at 1.15% after hitting earlier at 1.20%, the highest since March.

Overnight Currency Ranges

AUD/USD: 0.7652 – 0.7715

EUR/USD: 1.2020 – 1.2066

GBP/USD: 1.3680 – 1.3749

USD/JPY: 105.15 – 105.67

USD/CAD: 1.2742 – 1.2782

NZD/USD: 0.7179 – 0.7232

AUD/JPY: 80.79 – 81.19

AUD/NZD: 1.0653 – 1.0670

AUD Thoughts

The AUD/USD broke above 0.7680/85 and jumped to 0.7714, reaching the highest level since February 27. As of writing, it is hovering around 0.7700, holding onto daily gains and above the 20-day moving average. Demand is expected back toward 0.7580 while offering interest likely begins ahead of 0.7700 with the bigger technical resistance still sitting at the recent highs of 0.7820.

Event Risk Data Today

Australia: The January NAB business survey will be released. Conditions rose 7 points in December to an elevated +14.

NZ: While still low, the RBNZ inflation expectations survey pushed higher through the back half of 2020. Markets expect that there will be a further rise in the March quarter survey. Inflation surprised to the upside in the December quarter and supply disruptions have boosted the prices of some goods.

China: A big month of lending ahead of Lunar New Year should see January new loans push to CNY 3500.00bn. Meanwhile, January M2 money supply is set to maintain momentum (market f/c: 10.0).

US: The January NFIB small business optimism index should get a boost from recent success in controlling infections (market f/c: 97.5). The market expects that December JOLTS job openings will remain broadly stable at 6400. Volatility in initial claims and employment data point to ongoing churn in the labour market.