Chinese data, global risk appetite levels, and the broad dollar tone remain primary determinants for the AUD-USD today and in the short term.
A look at the latest Australian Dollar exchange rates shows fresh AUD strength on Monday morning:
- The pound sterling to Australian Dollar exchange rate is 0.1 pct lower than seen at Friday's close.
- The euro to Australian dollar exchange rate is 0.44 pct lower at 1.4337.
- The Australian dollar to US dollar exchange rate is 0.35 pct higher at 0.9427.
Be aware that the above are spot market inter-bank currency rates. Your bank will charge a spread when transferring your money. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering you up to 5% more currency. Please learn more here.
Near-term outlook for the Aus dollar
Emmanuel Ng at OCBC says that for the AUD/USD the 100-day MA (0.9331) is expected to offer initial support on dips before the 0.9300 level.
"On the top side, expect hesitation towards 0.9355 pending the China PMI later this morning," says Ng.
Gareth Berry at UBS says:
"Resistance is at 0.9529, a break above which would extend the strength to 0.9715. Support is at 0.9286 and 0.9211."
Ipek Ozkardeskaya at Swissquote Research says:
"AUDUSD traded up to 0.9438 early in the session. Offers remain tight pre-0.9500 as stronger AUD increases the probabilities for a future RBA rate cut to cool down the markets."
Fundamental forecasts for the Australian dollar
From a fundamental perspective we note that UBS have raised their forecasts for the Australian Dollar / US Dollar exchange rate.
Commenting on the move, Berry says:
"We expect last week’s FOMC meeting will keep the dollar weak for one quarter before its longer-term uptrend can resume. So we revised our short term forecasts across the board overnight.
"We raise our 1m and 3m AUDUSD forecasts to 0.95 and 0.93 (from 0.88 and 0.88 respectively). Similarly, we expect NZDUSD to trade at 0.84 and 0.83 over the next one to three months (compared to 0.78 and 0.79 previously)
Reserve Bank of Australia to talk AUS Dollar lower
Alvin Pontoh at TD Securities takes a contrarian view on the Aussie warning that the Reserve Bank of Australia is likely to act on the appreciating currency.
"Is the clear downtrend that we’ve witnessed since April, particularly in relation to the AUD, reversing as we speak?
"What we can be certain at this point is that the RBA will not sit back passively. One possibility is the re-introduction of an explicit easing bias by stating there is scope to cut rates in view of the inflation outlook (which is what the RBA had been expressing up to the August meeting, when it last cut rates).
"The RBA is likely to be back jawboning the currency at its next meeting in October. The September Board minutes described the AUD to be merely “at a high level” and expressed hope to see “some further decline in the exchange rate”. How the RBA might choose to talk down the Aussie dollar next month is any one’s guess."