The Australian dollar is under selling pressure on Wednesday morning following disappointing data that has scuppered a recent rally.
A look at the global FX markets shows:
- The sterling to Australian dollar exchange rate is 0.7 pct higher at 1.7355.
- The euro to Australian dollar exchange rate is 0.6 pct up at 1.4483.
- The Australian dollar to US dollar exchange rate is meanwhile 0.6 pct lower at 0.9344.
Be aware: The above are inter-bank market quotes, your bank will add a discretionary spread to the figures. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here.
After the RBA kept interest rates on hold boosting the AUD, building approvals and trade balance figures have come in below expectations and erased previous gains.
The trade deficit unexpectedly deepened from AUD -765M to AUD -815M in August, sending the Aussie lower against all its G10 peers except NZD (AUDNZD extended gains to 1.1427).
AUDUSD remained capped at 0.9435 after hawkish RBA statement this week and retreated to 0.9352 in Sydney.
Analysts at ICN Capital Markets have advised that they are opting to sit on the sidelines as the recent bullish sentiment behind the Australian currency can no longer be guaranteed:
"The pair retreats from 0.9435 high yesterday, failing to maintain the strong bullish bias. An initial support resides at 0.9350, followed by the 38.2 percent Fibonacci level at 0.9280.
"We would like to see price resettle back above 0.9375 to reconsider the intraday bullish scenario, however for now, we prefer to move to the sidelines, as price could be heading towards a period of sideways market. We will look for signs of intraday bounces over the lower time intervals."