The trend was not a friend to Aussie bulls this week as geopolitical concerns, dovish RBA commentary and negative Australian business sentiment updates had sellers out in force and making moves.
Australia Headlines and Economic data
- RBA’s Kent Says Rate Cuts Containing Currency, QE a Long Way Off
- Global risk-off sentiment sparked by a combination or rising geopolitical concerns (Boris Johnson wins U.K. PM; no-deal Brexit odds rise) and weak global economic updates (Eurozone PMI shows manufacturing downturn deepens) was arguably the reason we saw Aussie weakness during the U.S. trading session despite any direct catalysts related to Australia and positive news from the U.S.-China trade story that in-person talks could be held next week.
- The Conference Board Leading Economic Index for Australia decreased 0.1 percent in May 2019 to 107.4
- The July Australia Flash PMI pointed to slower rises in both business activity and new orders at the start of Q3 – not only were the latest headline numbers below the previous reads, but previous were revised lower to signal rocky times ahead for the Australian economy
- RBA Chief Says He’s Ready to Ease Again, Sees Rates Staying Low – immediate bearish reaction in Aussie pairs off of Lowe’s speech, and likely the main driver for Aussie pairs to drift lower for the rest of the week.
- Geopolitical concerns rose and drove traders out of high-yielders on the session like the Australian dollar, this time possibly on reports of Iran test-firing a medium-range ballistic missile, adding fuel to the already tense situation between the U.S. and Iran