Could our Aussie dollar hit 76 US cents by quarter-end? CBA thinks so.

A slowdown in service and manufacturing activity blamed on extended Covid-19 lockdowns is likely to see China’s purchasing managers index contract in May. As the figures are retrospective, it also provides a foundation for June’s results. These numbers should be helped by further economic support measures such as taxi and ride hailing services in low-risk areas where residents are finally being permitted some freedom to move about, albeit in a limited fashion.

With the figures due at 11.30am AEST, CBA currency analysts believe the results could “provide a modest intra-day impact on AUD”. We’ve already seen some upside already, with the AUD extending its rally from yesterday’s close of 71.87 US cents to be currently fetching at 71.99 US cents. Those same analysts have forecast the Aussie dollar to hit 76 US cents by the end of the quarter.

Aussie investors are also awaiting the final GDP input data for April today. These numbers, which include company profits, business inventories, the current account, government spending and investments are a precursor to the March quarter GDP figures released tomorrow.

Finally, the Reserve Bank of Australia is set to issue its Financial Aggregates publication, and both ANZ and Roy Morgan will be releasing their weekly consumer sentiment data later today.

Source: Bloomberg