Improvement in stocks Monday took the US Dollar (USD), Australian Dollar (AUD) to just shy of 0.7000 briefly before falling lower to 0.6960 as the DOW index ended the day flat. Greenback weakness from last week’s fallout from the Fed raising rates to 1.75% is evident highlighting slower growth prospects on the horizon. The result of guidance suggested at 50-75 points in July and two more large increases before the end of the year will inevitably stifle job’s data and downgrade growth. The big story has been iron ore- down from last week’s 146 per ton to 125 this morning in light of Chinese covid lockdown fears and weaker steel production due to softer margins. The price of rebar has been hit hard down 9% signalling construction has slowed due to sharp covid restrictions. On the calendar we have RBA’s Lowe’s minutes of the June 7th policy meeting and Fed chair Powell testifying Thursday. For those looking at buying USD- roadblock resistance on the chart around 0.7060 will be tough to breach.
Current Level: 0.6957
Resistance: 0.7040
Support: 0.6850
Last Weeks Range: 0.6848-0.7066