Home Daily Commentaries Aussie dollar trades above 65 US cents

Aussie dollar trades above 65 US cents

Daily Currency Update

The Australian dollar is slightly stronger this morning when valued against the Greenback reaching an overnight high of 0.6541. The Aussie dollar rallied yesterday following the US inflation report for October indicated that the headline inflation grew at the slowest growth in more than two years. The annual headline CPI rose by 3.2%, softened from estimates of 3.3% and the former reading of 3.7%. A decisive break above August 15 high around 0.6520 will drive the AUD/USD pair to August 9 high at 0.6571. Breach of the latter will drive the Aussie towards August 10 high at 0.6615.

On the data front today all eyes will be on the Jobless Rate figures. Last month Australia's unemployment rate has edged lower to 3.6 per cent, but only because fewer Australians have been looking for work. The participation rate which measures the proportion of people aged 15 and over either in work or actively looking for it dropped sharply from 67 per cent to 66.7 per cent, pushing unemployment lower. The labour market needs to generate around 37,000 jobs a month currently to keep the unemployment rate flat on an unchanged participation rate. Australian Employment Change for October is expected to show an additional 20 thousand job additions for the month, an increase from September's 6.7 thousand. Meanwhile, the Aussie Unemployment Rate is expected to tick upwards from 3.6% to 3.7% in October.

Key Movers

This week the US economic calendar has featured inflation reports from the consumer and producer side, with both readings missing estimates. The US inflation report for October indicated that the headline inflation grew at the slowest growth in more than two years. The annual headline CPI rose by 3.2%, softened from estimates of 3.3% and the former reading of 3.7%. US Retail Sales for October came in above expectations, but still saw some declines to print at -0.1% against the forecast -0.3%, and September's read was revised upwards from 0.7% to 0.9%. US Producer Price Index (PPI) ex Food & Energy for the year into October also missed expectations slightly, printing at 2.4% against the street's expected hold at 2.7%. The data sparked speculations the Fed could have ended its tightening cycle. Interest rate futures traders linked to federal fund rates have priced in 88 basis points of rate cuts towards the end of  2024, spurring a drop in US Treasury bond yields. Other data revealed by the Department of Commerce, Retail Sales in the US disappointed analysts, contracted -0.1% MoM in October, less than the -0.3% consensus. Ahead today the US economic calendar will feature unemployment claims, Industrial Production, and Federal Reserve (Fed) speakers.

Expected Ranges

  • AUD/USD: 0.6400 - 0.6500 ▲
  • AUD/EUR: 0.5900 - 0.6100 ▲
  • GBP/AUD: 1.8960 - 1.9160 ▼
  • AUD/NZD: 1.0700 - 1.0800 ▲
  • AUD/CAD: 0.8800 - 0.9000 ▲