AUD troubled by stronger USD

Key Movers

A stronger-than-anticipated US jobless claims report allowed the US dollar to extend its post-Federal Open Market Committee upturn through trade on Thursday, pushing the DXY index to its highest level in 6 months. Unemployment claims fell last week, hitting their lowest level since January in a downward trend that defies expectations of a looser US labour market. With most investors preparing for an end to interest rate hikes, a string of stronger labour market and macroeconomic data has forced a correction in 2024 rate expectations with the Fed now expected to maintain a higher setting for longer.
With the USD testing new highs the GBP was among the weakest major currencies after the Bank of England elected to leave rates on hold overnight. In what was a close call MPC policy makers voted to leave rates at 5.25%, ending a run of consecutive rate adjustments dating back to the end of 2021. While a tightening bias was maintained markets have pared expectations for future rate hikes with just 70% anticipating another adjustment before year-end. The GBP slipped below US$1.23 and US$1.2250 following the policy decision and while it found some support as the USD pared early gains it still opens this morning below US$1.23.
Our attention now turns to domestic consumer confidence and trade data ahead of Japanese inflation data a Bank of Japan policy meeting and European and US PMI data updates.