Good morning,
Welcome to our daily market update where we help keep you informed on the latest happenings in the world of FX and show you what this means for the Mighty Aussie Dollar.
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Key Data Being Released Today Friday the 3rd of December 2021
- CNH – Caixin Manufacturing PMI
- Overnight/Early Saturday morning
- CAD – Unemployment Rate
- USD – Non-Farm Employment Change
- USD – Unemployment Rate
- USD – ISM Services PMI
- USD – Treasury Currency Report
The Aussie Dollar – Fundamentals
AUD/USD slipped under the 0.7100 overnight, but the market firmly has it’s focuses on the US jobs numbers coming out early Saturday morning our time. If these numbers are better then expected it has the ability to give the bears fresh momentum to push the Aussie dollar lower.
Thursday saw the release of further Australian economic data; monthly retail sales and trade balance numbers were broadly in line with expectations, though monthly home loans figures saw a surprise MoM contraction. Thursday’s batch of data didn’t really shift the dial much and come after Wednesday’s not as bad as feared GDP figures, which showed the economy shrinking at a 1.9% QoQ in Q3 versus an expected 2.7% QoQ drop in economic activity (as a result of lockdowns).
For now, it seems that AUD is being insulted from domestic Covid-19 concerns as hawkish central bank expectations are priced back in, with money markets betting the RBA will keep pace with the Fed and start hiking interest rates in June next year. The RBA has insisted that it won’t hike until 2023 at the earliest, but the less bad than feared downturn in GDP in Q3 sets the stage for a stronger rebound in Q4 and the quarters ahead. “We expect the RBA to announce, next week, a decision to taper its bond-buying to A$2 billion a week from February, and likely end QE in May” Nomura economist Andrew Ticehurst told Reuters on Thursday, despite RBA Governor Philip Lowe saying a decision on QE would not be made until February.
The Aussie Dollar – Technical Analysis
Overnight the Aussie dollar continued to grind lower and closed the day below the key 0.7110 support level, but only by a few points. We will be watching the price action very closely as we are still waiting for the market to consolidate its break of this significant support level.
Resistance on the Top Side – If the market rebounds higher resistance will start at 0.7172, then 0.7300 which will be closely followed by the 50-Day MA at 0.7325.
Support on the Downside – We will be watching the market very closely today to determine if the market will consolidate the break off the key 0.7110 support level. If the market continues to fall there is the psychological support at 0.7000 and beyond that 0.6800.
AUD/USD Daily Chart
DXY (USD INDEX) Daily Chart
Major Global Markets
- Stocks
- S&P 500 closed at 4577
- NASDAQ closed at 16016
- ASX 200 closed at 7225
- Currencies
- AUD/USD – At the time of writing this report trades at 0.7089
- AUD/JPY – At the time of writing this report trades at 80.29
- AUD/CNH – At the time of writing this report trades at 4.5158
- DXY (US Dollar Index) – At the time of writing this report trades 96.129
- AUD/EUR – At the time of writing this report trades 0.6275
- Bonds
- US 10-year Bonds are currently at 1.444
- Aussie 10-year Bonds are currently at 1.667
- Commodities
- Iron Ore 62% – Trading at USD/T 101.82
- Gold – trading at USD/OZ 1768
- Brent Crude Oil – Trading at USD/Bbl 70.48