Aussie dollar falls below US$0.65
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Daily Currency Update
The Australian dollar is weaker this morning when valued against the Greenback, currently trading at US$0.6486 at the time of writing. The Australian dollar resumed its bearish trend on Monday, weighed by the US dollar’s strength following better-than-expected US manufacturing data. The AUD/USD pair is now testing support at US$0.6480, which closes the path to the big target, at US$0.6440.To the upside, the mentioned reverse trendline, at US$0.6530 is the immediate resistance before US$0.6555. Last week on the local data front inflation held steady for the second month in a row, as cheaper meat and seafood helped offset rent and automotive fuel increases.
The monthly index of consumer prices rose only 3.4% in the year to February, stabilising near the pace of the increases in January and December, the Australian Bureau of Statistics said on Wednesday. Economists had predicted February’s CPI would come in at 3.5%.
Looking ahead this week and today the Reserve Bank of Australia (RBA) will release the Monetary Policy Meeting Minutes, a detailed record of the RBA Reserve Bank Board's most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates. We will also see the release of the Australia and New Zealand Banking Group (ANZ) monthly Job Advertisements. On Thursday the Australian Bureau of Statistics will release the monthly Building Approvals.
Key Movers
Two reports out Monday showed that the US manufacturing sector is in its strongest position since 2022. The Institute for Supply Management's manufacturing PMI indicated the manufacturing sector moved into expansion for the first time since September 2022 in March. A measure from S&P Global showed production hit a 22-month high last month as the US economy continues to impress.According to Bloomberg data, the ISM's manufacturing PMI registered a reading of 50.3 in March, up from February's reading of 47.8 and higher than the 48.3 economists expected. In reaction to ongoing US economic resilience, the odds for a rate cut in June's meeting dropped from 85% to around 65%. The dollar index, which measures the U.S. currency against six rivals, was 0.4% higher at 104.99.
On Friday, the Commerce Department's Bureau of Economic Analysis said the personal consumption expenditures (PCE) price index rose 0.3%, compared with the 0.4% rise that economists polled by Reuters had forecast. The Dow Jones Industrial Average dipped on Monday to kick off the second quarter, with traders weighing fresh U.S. inflation data amid fears that the market rally could slow down.
The Dow lost 264 points or 0.7%, while the S&P 500 shed 0.3%. The tech-heavy Nasdaq Composite dipped less than 0.1%. Investors remain cautious about the pace of the Federal Reserve’s rate-cutting timeline this year and how soon central bankers will be able to meet their 2% inflation target. On Friday, Federal Reserve Chair Jerome Powell said that economic growth remains strong and inflation is still above target.
Expected Ranges
- AUD/USD: 0.6400 - 0.6600 ▼
- AUD/EUR: 0.5900 - 0.6100 ▼
- GBP/AUD: 1.9200 - 1.9400 ▲
- AUD/NZD: 1.0800 - 1.1000 ▲
- AUD/CAD: 0.8700 - 0.8900 ▼