Aussie dollar trades back above 64 US cents
Daily Currency Update
The Australian dollar is slightly stronger this morning when valued against the Greenback, trading below 64 US cents. The Australian dollar recovered some ground on Monday against the US dollar as investors brace for a busy week in the central bank space.The AUD/USD pair recovered its losses after retracing from a two-week high of 0.6473 during the early European session on Monday. Improvement in Chinese economic data, propelled by its government, cushioned the Aussie’s fall. The AUD/USD is trading at US$0.6427 at the time of writing after hitting a daily low of US$0.6417.
Market sentiment has improved due to Chinese data portraying a more optimistic outlook, which was threatened by deflation and a sudden economic slowdown.
Looking ahead today on the data front and today the Reserve Bank of Australia (RBA) will release the Monetary Policy Meeting Minutes after the Australian central bank maintains its cash rate at 4.10% for a third consecutive month. It's a detailed record of the RBA Board's most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates.
The attention will shift to the Fed's monetary decision on Wednesday. In local data news on Wednesday, the Melbourne Institute will release the Indexes of Economic Activity. This index is designed to predict the direction of the economy, but it tends to have a muted impact because most of the indicators used in the calculation were released previously.
Finally, on Friday we will see the release of both Manufacturing and Services Purchasing Managers' Indexes (PMI).
Key Movers
Looking ahead this week, the Federal Reserve is not expected to alter short-term rates from their current 5.25%-5.5% level at the next rate announcement on September 20. However, the projections and press conference associated with the meeting will help signal whether rates could be increased at one of the remaining two Fed meetings of 2023.The September meeting will disclose the latest Summary of Economic Projections from Fed decision-makers. This includes a set of forecasts for year-end interest rates. For 2023, this will signal where policymakers see rates going at the November and December Fed meetings.
Last week, the US economy witnessed an uptick in inflation on the consumer and producer side while the jobs market remains hot. Retail sales expanded slower than estimated but remained solid above the 2% threshold. Nevertheless, consumer sentiment slipped, blamed on elevated gasoline prices, as revealed by a University of Michigan poll (UoM).
Expected Ranges
- AUD/USD: 0.6300 - 0.6500 ▲
- AUD/EUR: 0.5900 - 0.6100 ▲
- GBP/AUD: 1.9100 - 1.9300 ▼
- AUD/NZD: 1.0750 - 1.0950 ▲
- AUD/CAD: 0.8550 - 0.8750 ▼