Home Daily Commentaries Aussie dollar falls below 64 US cents

Aussie dollar falls below 64 US cents

Daily Currency Update

The Australian dollar is slightly weaker this morning when valued against the Greenback. The Aussie dollar fell 0.12% on Friday and extended its substantial losses during the week, which has witnessed the AUD/USD pair traveling from a weekly high above 0.6520 toward a low of 0.6327 at the time of writing. Last week the Aussie Dollar failed to gain strength despite an interest rate hike from the Reserve Bank of Australia (RBA) on Tuesday. The RBA raised its Official Cash Rate (OCR) by 25 basis points (bps) to 4.35%. RBA Governor Michele Bullock kept hopes of further rate-tightening alive, citing that the progress in inflation declining to 2% has slowed and risks of persistent consumer inflation have escalated.
On the data front this week and on Tuesday we will see the release of both the Westpac Consumer Sentiment and NAB Business Confidence which are leading indicators of economic health. Businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment. On Wednesday the Australian Bureau of Statistics will release the Labour Price Index which is a leading indicator of consumer inflation - when businesses pay more for labor the higher costs are usually passed on to the consumer. Finally, on Thursday all eyes will be on the Jobless Rate figures which are forecast to increase from 3.6% to 3.7%.

Key Movers

The Greenback showed minimal movement on Friday. The DXY index which measures the value of the US Dollar versus a basket of global currencies, stood with slight losses at 105.80 as bulls seem to be taking a hiatus. The Greenback strengthened after Federal Reserve (Fed) hawks hinted that there may be further tightening, which revived the US Treasury, allowing the Dollar to gain interest. The Initial Jobless Claims from the week ending November 3 came in at 217,000, lower than the expected 218,000 and fell in relation to its last reading of 220,000. Wall Street finished the week higher, as the S&P 500 prints solid gains above the 4,400 figure, shrugging off a deteriorated consumer sentiment. A poll of the University of Michigan (UoM) revealed that Consumer Sentiment deteriorated, while American households upward revised inflation expectations from now to a one-year horizon at 4.4%, while for five years, at 3.2%.

Expected Ranges

  • AUD/USD: 0.6230 - 0.6430 ▼
  • AUD/EUR: 0.5820 - 0.6020 ▼
  • GBP/AUD: 1.8970 - 1.9170 ▲
  • AUD/NZD: 1.0680 - 1.0880 ▼
  • AUD/CAD: 0.8660 - 0.8860 ▼