The Australian Dollar extended its advance, finishing as best-performing major against the Greenback for the second day running. AUD/USD traded to a fresh seven-week and overnight high at 0.65138 before easing to settle at 0.6494 in late New York (0.6460 yesterday). The Aussie has had a good run this week after Scott Morrison’s government began opening-up the economy yesterday. Australia is seen as one of the more successful countries in its fight to control the coronavirus outbreak. Together with New Zealand, both countries immediately closed their borders before the World Health Organisation declared Covid-19 a pandemic.
The broadly based weaker US Dollar has also supported the Aussie and commodity currencies (Kiwi, Loonie). Expectations for key data releases today are for a much weaker US GDP report and a relatively stable Australian CPI. Which are both Aussie bullish, but risk disappointment. Today’s headlines focus on Australia’s call for a global inquiry into the origins and propagation of Covid-19 which has been strongly disputed by China. Sky news reports that Australian Treasure Josh Frydenberg said “Australia will not bow to economic coercion.” Which could weigh on the Aussie and risk a setback.
AUD/USD has immediate resistance at 0.6520 followed by 0.6550. Strong resistance can be found at 0.6600. Immediate support can be found at 0.6460 followed by 0.6420. Look to trade from the short side with a likely 0.6380-0.6520 range today.