The Australian dollar is unchanged on Thursday. Currently, AUD/USD is trading at 0.7364, down 0.02% on the day.
Aussie shrugs off weak data
The Australian dollar rocketed upwards on Tuesday, with gains of 1.o percent. The currency then hit the brakes hard, as AUD/USD hasn’t moved since then. The pair has been flat on Thursday, with US markets closed for the Thanksgiving holiday. Still, the Aussie is trading at its highest levels since early September and has closed in on the round number of 0.7400. The US dollar remains on the defensive, and cyclical commodity currencies like the Australian dollar have taken advantage and gained ground against the greenback.
Australia has posted disappointing numbers this week, but it hasn’t hurt the Australian dollar, which has held its own since its impressive climb on Tuesday. On Wednesday, Construction Work Done declined by 2.6% in the third quarter, which was worse than the forecast of -2.0%. This marked a ninth straight quarter with a decline, as the construction sector has been marked by a prolonged contraction. The industry has been in decline since mid-2018, and the Covid pandemic, which has resulted in numerous lockdowns, has only added to the slump in construction.
This was followed on Wednesday by Private Capital Expenditure, a key gauge of activity in the private sector. The indicator contracted for a seventh successive quarter, with a read of -3.0%, which was weaker than the consensus of -1.5%. Still, this was an improvement from the Q2 release of -5.9%, which was the sharpest decline since 2015.
AUD/USD is expected to have a quiet run for the remainder of the week, as Friday is an official holiday in the US. However, the Aussie will likely show some significant movement next week, with the RBA holding its policy meeting and the release of Australia GDP for the third quarter.
- AUD/USD faces resistance at 0.7385. Above, there is resistance at 0.7430
- We find support at 0.7360, followed by support at 0.7215
- AUD/USD easily broke above the 10-day MA line on Tuesday, a sign of an upward trend
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