EBC Markets Briefing | Aussie dollar steadies after weak US economic data

The Australian dollar traded near a seven-week high on Monday as softer-than-expected US jobs report weakened the greenback and a broader improvement in risk appetite boosted demand for commodity currencies.

The private sector shed 23,000 jobs in July, a sign that the labour market had not stabilized after four months of positive growth. The prior two months have also been revised down sharply.

Adding to a broader dim picture, GDP growth was weaker than expected in Q2 though underlying drivers were mostly solid, while inflation held well above the Fed's target of 2%.

Iranian Foreign Minister Abbas Araghchi denied Washington's claims of an imminent deal, stating that Tehran is not in direct talks with the U.S. to open the Strait of Hormuz and end the war.

Australian business mood lifted slightly in May, but confidence is still deeply in the red and margins are under the most pressure in years. That means the economy is muddling through.

China's deepening property downturn is now the single biggest weight on the country's base metals demand, especially iron ores which remain Australia's largest export.

EBC Financial Group analyst says that the Aussie dollar managed to cross the 50 SMA, signalling a significant shift from a correction phase to a medium-term bullish trend. The next immediate upside target is the 0.7121 -0.7151 area.

Asset Recap

As of market close on 7 August, among EBC major products, gold prices led gains. UBS expects gold to reach $5,000 by the first half of 2027, citing falling real yields, dollar weakness and steady central bank buying.

Uber Technologies shares surged even after several Wall Street analysts lowered their price targets following the company's mixed Q2 report. CEO Dara Khosrowshahi highlighted progress on both robotaxi expansion.

Zoetis presented its Q2 results, revealing a challenging operating environment marked by weakening US companion animal demand and intensifying competition in key product categories.

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EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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