Home Daily Commentaries Aussie dollar range bound in quiet start to the week

Aussie dollar range bound in quiet start to the week

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Tuesday 20 February, 2024

Daily Currency Update

The AUD enjoyed a quiet start to the week maintaining a narrow range in the absence of headline newsflow and Tier 1 macroeconomic data. With US markets closed in observance of President’s Day, volume and liquidity were thin, while a lack of major data events afforded investors the chance to consolidate positions.

Having pushed off year-to-date lows at US$0.6443 in the wake of last week's hotter-than-expected US CPI print, the AUD held onto gains won later in the week and opened the day just short of US$0.6530, edging higher on the day to touch session highs at US$0.6548.

Our focus turns now to the RBA minutes. We expect few surprises given Governor Bullock has spoken twice since the February 6 meeting, offering little suggestion of any shift in the RBA outlook. The AUD remains vulnerable to US-implied monetary policy expectations.

With US PPI numbers higher than expected on Friday, an elevated PCE deflator print next month is on the table. As the Fed’s preferred measure of inflation, a strong read could push back expectations for a rate cut and weigh on the AUD.

Key Movers

Price action was muted through trade on Monday, with the NZD the only major showing any sign of life. US markets were closed and a marked absence of headline data and newsflow ensured there was little impetus for investors to drive a shift in direction.

The USD, EUR, GBP and JPY all maintained narrow trading handles with moves restricted to the second decimal point. The US dollar continues to hold above 150 against the yen, while the euro and GBP offered little to excite investors.

While markets return from Presidents Day and Chinese New Year we may see some moves as liquidity levels normalise but with little outside the RBA minutes and Canadian CPI on the macroeconomic docket, we could be in for another quiet day.

We don’t expect the RBA minutes to offer anything we don’t already know while Canadian CPI is expected to show further annual depreciation across both headline and core metrics.

Expected Ranges

  • AUD/USD: 0.6440 - 0.6600 ▲
  • AUD/EUR: 0.6000 - 0.6100 ▲
  • GBP/AUD: 1.9000 - 1.9400 ▼
  • AUD/NZD: 1.0580 - 1.0680 ▼
  • AUD/CAD: 0.8780 - 0.8880 ▲

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.