The Australian dollar is unchanged in Wednesday trade. AUD/USD is currently trading at 0.7185, down 0.10% on the day.
Construction Work Done dips
Australia’s construction sector continues to limp along, a victim of the severe economic conditions in the wake of the Covid-19 pandemic. One of the most important construction indicators, Construction Work Done, has pointed to contraction in the sector since Q2 of 2018. On Wednesday, the indicator again dipped, with a Q2 reading of -0.7%. This figure was marginally better than the Q1 read of -1.0%, and also stronger than the forecast of -6.5%.
Will Private Capital Expenditure tumble?
The business sector is also hurting, and analysts are braced for a sharp drop from Private Capital Expenditure, which is projected at -8.2% for the second quarter. The extensive lockdowns in April and May took a sharp toll on business activity, and this will likely translate into a soft reading. If the Q2 decline hits double-digits, the Aussie could lose ground.
AUD/USD has moved upwards in the North American session, after limited movement in the Asian and European sessions
- AUD/USD is testing resistance at 0.7211. This is followed by resistance at 0.7228.
- There is support at 0.7164. Below, we have support at 0.7134.
- AUD/USD is just above the 10-day MA, after breaking above the line on Tuesday