The Australian Dollar (AUD) hit a new six-year low early morning yesterday as the result in the Greek Referendum arrived with a “No” vote from the Greek people. The AUD/USD Exchange Rate hit a low of 0.7452 recovering back above 75 cents at 12:00pm and then falling back into the 0.74’s later in the day.

OANDA Australia and Asia Pacific Senior FX Trader Stephen Innes said investors were taking a very cautious approach to the market after the result, but the vote outcome wasn’t the only factor influencing the currency. “Although we’re seeing some risk-aversion trade vis-a-vis the Aussie, last week’s 10 per cent drop in iron ore price is definitely weighing on sentiment,” he said.

After disappointing local data, strong US data and now the Greece decision, the AUD is really finding it hard to gain any ground against the USD, dropping from as high as 0.7850 in the past few weeks. 

Tuesday sees the release of the AIG Performance of construction index and the RBA Board meeting to decide on interest rates. Most market watchers expect the RBA to hold rates steady, but the NAB economics team said on Friday that “The out-performance of the labour market continues to buy more wait and see time for the RBA, even though the economy’s transition remains far from secured, keeping alive the RBA’s stated policy commitment to ease further, but only if needed and not needed now”.

NAB expects the RBA will continue to leave the cash rate steady. Thursday’s employment report will reveal whether there has been any growth or lessening of labour market slack for the economy overall.

Tuesday evening will see the release of May’s USD Trade Balance which is forecast to increase from $40.90B to $42.75B making sure that the AUD/USD will see more movement throughout Tuesday and a real chance of the AUD continuing to fall.

As of Tuesday 08:00am the AUD/USD Exchange Rate was trading at 0.7496