Home Daily Commentaries Aussie dollar continues to trade above 64 US cents

Aussie dollar continues to trade above 64 US cents

Daily Currency Update

The Australian dollar is slightly stronger this morning when valued against the Greenback. The Aussie dollar on Friday rallied to a nine-week high as it capitalised on Greenback weakness following a weaker than expected Nonfarm Payrolls reading and risk-on market sentiment. Cooling US data is helping to confirm that the Federal Reserve (Fed) is done with rate hikes, and investors are now turning forward to start anticipating a future rate cut cycle from the US central bank. The dovish message following the Federal Open Market Committee (FOMC) policy meeting exerts some pressure on the USD. However, the upward trajectory of US Treasury bond yields will likely continue to dominate the USD performance in the next sessions.
On the data front last week we saw Australian Retail Sales for the third quarter (Q3) improved by 0.2% QoQ versus from 0.6% drop in the previous reading. Meanwhile, Judo Bank Composite PMI came in at 47.6 in October from the previous reading of 47.3. The Services PMI grew to 47.9 in October from 47.6 in September. The upbeat Australian economic data and risk-on environment boost to Australian Dollar (AUD) against the Greenback. Looking ahead this week and on Tuesday the Reserve Bank of Australia (RBA) to raise the cash rate by 25 basis points (bps) on Tuesday while holding the hawkish stance.

Key Movers

On Friday the US added another 150,000 jobs in October, fewer than expected, amid signs that the white-hot US jobs market is cooling. The unemployment rate rose to 3.9% from 3.8% in September. Economists had been expecting the US to add 180,000 jobs over the month. The pace of job growth slowed sharply from September when the economy added a revised 297,000 – a still impressive figure and far higher than had been expected. Wall Street finished the week with gains on Friday, following a turbulent week. The US equity benchmark, the S&P 500, advanced 0.9%, finishing at 4,356.34, posting 5.9% weekly gains. The Nasdaq Composite jumped 1.4% and ended at 13,478.28, and the Dow Jones Industrial climbed 200 points or 0.66%, clinging above the 34,000 mark. Looking ahead next week the US economic calendar features Federal Reserve speakers led by Chair Jerome Powell, Lisa Cook, Christopher Waller, Philip Jefferson, and some Federal Regional Bank Presidents. On the data front, Initial Jobless Claims and the University of Michigan (UoM) Consumer Sentiment are the primary data points to be released. On November 14th, the US will report inflation rate figures from October, which investors will closely watch to continue modelling their expectations.

Expected Ranges

  • AUD/USD: 0.6400 - 0.6600 ▲
  • AUD/EUR: 0.5940 - 0.6140 ▲
  • GBP/AUD: 1.8800 - 1.9000 ▲
  • AUD/NZD: 1.0700 - 1.0900 ▲
  • AUD/CAD: 0.8750 - 0.8950 ▲