Australian Dollar Slides In Early APAC Trade

The Australian dollar slipped for a third session on Monday after repeatedly failing to break above key chart resistance at 77 US cents, with focus shifting to a slew of data and central bank events this week.

The Australian dollar was 0.18-per cent lower at US$0.7660, but remained near a 3-1/2 month high of US$0.7732 touched last week.

The Aussie has flirted with the 77 US cents mark for most of February and finally breached it twice last week only for those gains to fizzle away.

The currency is up 6.6 per cent so far this year, led by a massive rally in the price of iron ore – Australia’s No1 export earner – and a weakening US dollar. “The current ‘death valley’ at US$0.7700-US$0.7750 remains intact, suggesting that investors continue to grow cautious of not only the long Aussie position overhang, but also the sustainability of iron ore prices,” said Stephen Innes, senior FX trader for broker OANDA.

Traders expect Lowe to stick to his optimistic tune, given a run of positive data lately. “I think the tail risk would be for a more hawkish lean from the RBA than the market has priced in, but at a minimum, there’s little impetus for the RBA to veer from its current neutral tack,” Mr Innes added.

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