Aussie dollar continues to trade above US$0.64

Daily Currency Update

The Australian dollar is steady this morning when valued against the Greenback trading above US$0.64. Overnight the AUD/USD pair reached a high of US$0.6440. The upside in the Aussie asset seems restricted due to a solid recovery in the US dollar while the downside seems supported as Aussie-Sino trade relations improved. Australian consumer sentiment deteriorated further in early September, a private survey showed on Tuesday, as dwindling household savings, sticky inflation, and high-interest rates largely outweighed a less hawkish outlook for the RBA. The Westpac-Melbourne Institute Index of Consumer Sentiment dropped 1.5% to 79.7 in September, remaining close to its worst level since the 2020 COVID-19 pandemic. The reading was driven by persistent pessimism among consumers, especially over rising rents and a renewed surge in fuel prices. Rising fuel costs were a major contributor to increased living costs, especially as global oil prices shot up to 10-month highs in recent weeks. Higher oil prices also spurred concerns over a resurgence in inflation. While inflation has fallen substantially this year, it still remains well above historical averages, as well as the RBA’s annual 2% target. But the central bank has now kept rates on hold for four straight months and has reiterated a data-driven approach to future hikes. The Australian dollar will remain in action ahead of the Aussie Employment report, which will be published on Thursday. As per the expectations, the Australian economy recorded a fresh joining of 24.3K employees. In July, the labour force shed by 14.6K. The Unemployment Rate is seen declining to 3.6% vs. the July’s reading of 3.7%.