AUD rebounds and outpaces counterparts as risk sentiment improves
Daily Currency Update
The Australian dollar outperformed all other major counterparts through trade on Thursday, buoyed by improved risk sentiment and a weaker US dollar. While global rates continued their upward run, US treasury yields were only marginally higher on the day with the UK and Europe leading gains. A surge in UK rates flowed into European yields while mixed US macroeconomic data elevated calls for the Fed to announce an end to its tightening cycle. With US rates essentially flat on the day risk sentiment improved, buoyed further by reports talks between the US and China are gaining momentum. Improved US-Sino relations helped lift the yuan and drag the AUD back above US$0.64 and intraday highs just above US$0.6430. The AUD rebound extended across key counterparts, pushing back above 0.6050 against the euro and 0.5250 against the GBP, while forcing the NZD back below 0.93.Our attentions turn now to commentary from Fed Chair Jerome Powell, while Chinese Caixin PMI data, Euro area CPI, and the US PCE deflator index dominate the macroeconomic ticket.
Please note there will be no Daily Commentary on Monday 2 October due to the labour day public holiday.
Key Movers
There has been plenty of price action to digest through the last 24 hours as investors adjust speculative positions and month end balances amid mixed US data and improved risk sentiment. The US dollar DXY index retreated for the first time this week, paring recent gains in the face of higher UK and European yields and mixed domestic data. US consumer spending rose at is slowest pace in 12 months, while business investment fell, jobless claims edged higher, and house sales plunged. Concerns rising interest and mortgage rates may finally be impacting the housing market elevated calls for the Fed to announce an end to its tightening cycle. With signs the USD has entered overbought territory and with the month long equity sell off possibly overdone the USD retreated, allowing the GBP to move back above 1.22, the euro to push off lows below 1.05 and advance back toward 1.0580/1.06, and the yen to move back toward 149.With the risk narrative the driving force behind direction, our attentions turn now to commentary from Fed Chair Jerome Powell, while Chinese Caixin PMI data, Euro area CPI, and the US PCE deflator index dominate the macroeconomic ticket.
Expected Ranges
- AUD/USD: 0.6330 - 0.6480 ▲
- AUD/EUR: 0.6000 - 0.6100 ▲
- GBP/AUD: 1.8880 - 1.9180 ▼
- AUD/NZD: 1.0720 - 1.0820 ▲
- AUD/CAD: 0.8570 - 0.8720 ▲