Home Daily Commentaries AUD range bound as eyes turn to RBA Governor Lowe’s last meeting

AUD range bound as eyes turn to RBA Governor Lowe’s last meeting

Tuesday 5 September, 2023

Daily Currency Update

The Australian dollar maintained a narrow trading handle through Monday, amid a lack of headline newsflow and macroeconomic data. With US markets closed in observance of Labor Day, weekend price action across currency markets was muted with analyst content in sidelining major bets. China sentiment improved as officials took steps to help boost consumption and the beleaguered property market. Last week, policymakers moved to lower mortgage down payment requirements and lowered mortgage rates, helping to boost demand across the housing market. New home sales jumped at the weekend, up from the previous week and significantly improved on what can only be described as a disastrous August. Improved activity helped to sure up the Yuan, supporting the AUD on moves below US$0.6450.

Our attention now turns to today’s RBA policy update. This is Philip Lowe’s last policy meeting and we expect the departing Governor will look to leave rates on hold. With next to zero chance of a rate hike priced-in China Caixin service data may provide a catalyst for price action as China activity and sentiment remains key in guiding near-term direction.

Key Movers

With US markets closed in observance of Labor Day, there was very little price action across major currencies through Monday. Most majors maintained a narrow trading handle and all units sit within three-tenths of a percent when measured against Friday’s close. Sterling was the day's best performer, climbing through 1.26 to touch 1.2630 while the Euro continues to face near-term pressures, struggling on moves above 1.8050 and seemingly poised to consolidate a break below 1.08.

Our attention turns now to China service data, as a key measure of sentiment. With little else of note on Tuesday's docket, we look to US ISM service data on Wednesday and China's inflation data on Friday as the big-ticket macro items guiding direction through the rest of the week.

Expected Ranges

  • AUD/USD: 0.6380 - 0.6530 ▲
  • AUD/EUR: 0.5880 - 0.5990 ▲
  • GBP/AUD: 1.9420 - 1.9720 ▲
  • AUD/NZD: 1.0780 - 1.9050 ▲
  • AUD/CAD: 0.8680 - -1.118 ▲